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What Trump didn't say about TPP

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President Donald Trump kept one of his major campaign promises on Jan 23 when he withdrew the United States from the Trans-Pacific Partnership. The ramifications of Trump's decision are worrisome and, whether or not the withdrawal helps American workers, it would be helpful to U.S. standing in the region if he communicated better, and to a larger audience, exactly what he's trying to do. I have lived and worked in Asia for 25 years. Feelings of uncertainty about the United States right now are palpable. People want to know what's going on.

Trump was seated at his desk in the Oval Office on his first weekday as president. Behind him were Vice President Mike Pence and an entourage of advisors including Steve Bannon, Reince Priebus and Peter Navarro. Navarro's presence seemed incongruous for a University of California economist whose fame comes from warning Americans about the menace China's government poses to the United States' well-being. The TPP's standards on intellectual property protection, the environment and labor conditions effectively excluded China from joining the treaty because it would have made Chinese manufacturers spend what TPP members spend, something Beijing - always welcome to join - doesn't want to see happen. Trump surely knows that with the United States out, the treaty might die - and with it this leveling of the playing field - a gift for Beijing.

Priebus, a leather folio in hand, stepped forward. "OK, we're going to sign three memorandums right now. The first one is the withdrawal of the United States from the Trans- Pacific Partnership."

Trump reached for his pen as Priebus handed him the portfolio. He gave it the Chief Executive once-over, cocked his head, looked at the reporters in front of him, and jutted his jaw toward them slightly. "Everyone knows what that means, right? We've been talking about this for a long time, thank you." He signed it. "Okay." He held it up for the cameras - I'd hold it up too if I had a fabulous signature like his - and concluded, "Great thing for the American worker, what we just did."

That was it.

Problem is, nobody really does know what that means. Besides calling it "the death blow for American manufacturing" he hasn't said much about what he else has in store now that the United States is out. And while there's a lot of merit in the president's seeming willingness to let Beijing do a little guesswork for a change, there's not much merit in letting the other 11 countries in the TPP do the same. Some of the United States' closest allies - Australia, Canada, Japan and New Zealand - are in the TPP, and all the others are friends.

Even if one agrees with Trump's decision to withdraw the United States from the TPP, there's a lot of work to be done between now and the "great thing" arriving. Economists and the media have been insisting that jobs sent abroad aren't coming home and, even if they did, robots would be doing most of them. There's some truth in this. But I'd never bet against American business. As a retired private equity friend said to me recently, after complaining about his industry brethren who buy domestic businesses to send abroad to cash in on cheap labor, "We have to make stuff here." He didn't mean everything and he didn't mean all of it, but the hollowing out of the U.S. manufacturing base so the private equity guys and their banker friends can get rich was never a good thing for the country.

China might be able to make the world's steel at the lowest cost, for example, but what government would cede this strategic industry to Beijing? If the right policies emerge from Washington as the Trump team fleshes out its trade and related policies - which can't be simply increasing tariffs to keep the competition less competitive - expect American business to rise to the challenge. But they need to know what those policies are - uncertainty freezes business - and American allies and friends around the world do, too.

Here's what Trump should have said or, better, read from the written statement that wasn't on his desk, because his audience isn't hostile reporters, it's the rest of the world.

"Before I sign this, I'd like to say a few words. We recognize that our allies and close friends, with whom the last administration worked on the pact, are disappointed by our withdrawal from the TPP. International treaties like the TPP require ratification by our government, and we are not moving forward in no small part because the American people don't like the TPP, and we can't - I can't - go ahead. It's worth noting that my opponent was also against the TPP.

"We are not abandoning the Pacific region. From Japan to Australia, to Chile, to Canada, and stops in between, we value our relations with all the TPP countries and will continue to expand our trade with them all. Making America great again does not, in any way, come at the expense of our friends and does not, in any way, mean backing away from our long-term commitments and friendships. The TPP doesn't exist now, so trade tomorrow will be the same as trade today.

"As I said many times, we like trade and are happy to trade, even with China. We just want the trade to be fair. Since Richard Nixon extended a hand of friendship to China and the economic help from trade that came with it, our position has always been one of fair play and mutual gain. No Chinese government has reciprocated. It's time to change. Beijing doesn't play by the rules that have helped its rich accumulate vast personal wealth at the expense of others, both inside and outside of China. We're done being part of that. This is a regime that taxes our exports to them, bars some of our companies from entering, keeps entire sectors off limits to foreigners, and is making it increasingly difficult for foreigners who are there to do business. They want to buy our successful companies, especially in the technology sector and, recently, Hollywood, yet won't allow foreigners to wholly own or even control companies in many industries and restrict or prohibit outright investment in dozens of other industries.

"The United States and our allies and friends have led the postwar world in trade and establishing international institutions that have benefited billions of people globally. The United States has no intention of ceding that role or impeding global trade. We are studying all aspects of our trade and look forward to increased, mutually beneficial trade and security with all our allies and friends."

That's not a tweet, but it's the message America's allies and friends would like to hear directly from Trump. He hasn't actually done anything that's bad for global trade yet, except create a lot of uncertainty. Better communication from him can serve everyone well, and the sooner, the better.

© (c) Copyright Thomson Reuters 2017.

©2022 GPlusMedia Inc.

9 Comments
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In ancients times, after world war II , people depends on America, now is America necessary now ???. It had become a country of white racist instead of protecter or balancer. Anyone that waste anymore time with America is just wasting time and begging to lose tax payers money of their country. America wants to be a business man so does the rest of the world but having the rights to bully , added to the terms, that's another matter.

-3 ( +0 / -3 )

@vinarius - I am not sure where you are from but most likely the population of the U.S. is much more diverse than your country. I did not vote for Trump and do not support him but I would imagine if you believe in what you say you would be against TPP, as it would have a negative impact on people living in countries that are signatory and would give power to corporations (many of them U.S. corporations) to over-ride local laws.

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WHATEVER IT IS , being a big bully is not nice.

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He hasn’t actually done anything that’s bad for global trade yet, except create a lot of uncertainty.

Which actually IS bad for global trade. The man does not show an ability of having a vision - so far.

1 ( +1 / -0 )

The saying 'Cut your nose to spite your face comes to mind'. What Trump did to draw from the TPP means just that. I hope the Americans who voted for him gets the rebuilt factory jobs in the US, but I'm not holding my breath.

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Regarding TPP Renegotiation, these are my thoughts (I do not represent any government):

I disagree with most of the points for this effort:

The USA will not join into something that Japan spearheads alone, when USA is not included from the start. Thus, it is foolish to believe that if Japan leads a TPP-Light renegotiation, that USA would later join. The world does not work that way. The minute that Japan attempts to include Taiwan into a revised TPP with other APAC countries, then China will really get ugly diplomatically, with Trade, and Military might. Japan has no chance to negotiate Taiwan into a TPP-revamp Agreement. Japan has no economic or military might to convince Taiwan to go against the 'One China' policy; only USA has that might. If PM-Abe tries this, without USA involved from the start, Japan will be in real trouble. This is TERRIBLE idea. The damage is already done in Japan and throughout APAC region by the terminated TPP. All APAC countries will be very leery about rejoining a multi-lateral Trade negotiation lead only by Japan (too many rice-bowl issues; too many complaints against Japan to overcome if they are the lead). Japan Ambassador to USA attempted time and again to work with Clintons, because they felt she was a 'shoe-in'. In fact, the Ambassador tried to convince Chelsea Clinton to speak at 'Women's Empowerment' type of conferences (evidently to tell about how she used Clinton Foundation to fund her lavish lifestyle). Prime Minister Abe also rushed to meet with Hillary Clinton a couple months before (a mistake), but then he commented to the Japan press on 21 November (after meeting with President Trump) that the TPP without the USA is meaningless. Some ex-pat Americans who live and conduct consulting in Japan have berated PM-Abe for these comments, but they are the ones that are committing career suicide by not understanding the precarious nature of the balance PM-Abe faces between maintenance of USA-Japan alliance and that of serving the interests of his Japanese constituency. Short-sighted 'think-tankers' and University Professors such as this Yoshihide Soeya, professor at Keio University, are encouraging PM-Abe to bluster-forward with a hastily-modified TPP Agreement with the other Countries (minus USA), and hope that eventually USA will join that renewed effort at some point in future (e.g. 4-years from now when new Elections). Japan wants to hold a leadership role, particularly in light of the hegemony of China towards all the other nations. Unfortunately for Japan, if USA is not part of the Agreement, then it is 'economically meaningless'. However, that does not mean that Japan cannot continue to be ONE OF THE leaders in APAC, in collaboration with USA. Remember - it is not necessary to reach an Agreement at first, but only to seek an adjustment, ideally an improvement, in the issue or in the Trade Relationship. Without USA in the mix, there is very little incentive for these 10-countries to attempt another grand Multi-Lateral Agreement. The now-terminated TPP required that for it to go into force, countries that ratify the agreement through their domestic legislative processes must represent 85% of the total Gross Domestic Product of the twelve original signatory countries. The U.S. GDP represents 62% of TPP signatory nations. That means Japan and the other 10-countries only make up a tiny 23% of combined GDP of the original TPP gathering. There does not seem good justification for arduous and complex negotiating effort just to gather this smallish 23% of GDP into one Agreement. If Japan attempts to negotiate with USA on a Bi-Lateral nature (or new Multi-Lateral nature) then Japan has a much improved chance to negotiate a trade agreement that serves its own economic interests if it has alternatives to a no-deal—a longstanding insight of negotiation dynamics. Hence, a re-launched Multi-Lateral Agreement, with USA in the mix, strengthens Japan’s hand in future trade negotiations. Japan will almost surely attempt to use the potential Regional Comprehensive Economic Partnership (RCEP), as a bargaining chip against the USA. However, Japan should remember that they can NOT wait for USA Populism to wane, hoping that the USA will re-engage on a Trade Deal that Japan spear-headed after collapse of TPP. If USA is not one of the Agreement-Leads, then the USA will be forced to subvert any 'TPP-light' Agreements that Japan or China attempt to orchestrate to protect Bi-Lateral Agreements. Thus, at this moment, it appears to be 'All-in (with USA), or All-out'. However, the value is that a renegotiated Multi-Lateral Agreement, with USA included in the mix, does not have to start from scratch. The USA will always be one of the most important Economic & Trade Leadership roles in APAC. Japan and the APAC countries understand this. Therefore, they will most likely throw much effort into attempting to convince President Trump to renegotiate the Multi-Lateral Trade Agreement in a way to ensure continued USA participation, rather than trying to negotiate such an Agreement with Japan only as the Lead. One of the biggest problems preventing USA-Ratification of the TPP in Congress was the feckless handling of the TPP negotiations and the absolute veil of secrecy caused by Obama and the US Trade Representative (USTR) team. That would have occurred the same way under the feckless Hillary Clinton, had she won the election. When Obama and the USTR kept all matters of the TPP secret, except for participation by their favored jumbo-corporations (e.g. Sugar Industry; Clothing; Pharmaceuticals; Insurance; Boeing; etc.), then Congress and the entire USA business communities were left worrying incessantly about how it might affect their business interests. Everyone's fear of the unknown was much scarier than the reality. With or without the TPP, USA and Japan will be able to collaboratively draft and negotiate a bi-lateral Agreement that stymies China's apparent economic advantages (e.g. undemocratic, does not respect human rights, the rule of law, transparency, copyrights, environment, etc.). Then USA will be able to influence the other countries in the region to follow this because of the concept of collaborative security, which produces economic and trade growth. This will then counterweight China's closed market and anti-competitive legal system.
-1 ( +0 / -1 )

I do enjoy how the, article pulls out a few selling points about TPP but it glosses over the fact that for every good point 4 bad ones are likely in it. And the reality is, free trade doesn't require 20000 pages of legalese, only politicians setting up scams for themselves need a 20000 page agreement.

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This article write dude clearly doesn't understand the TPP. It had nothing to do with free trade, and everything to do with corporations subverting government sovereignty .

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And what is your vision presto345?

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