Trump vows to kill TPP on day one

Business Desk | Published: 23:52, Nov 22,2016

 
 

China may assume leadership mantle on trade, say analysts

Donald Trump said Monday the United States would signal its withdrawal from the Trans-Pacific Partnership (TPP) trade pact on his first day in the White House, one of six immediate steps aimed at ‘putting America first’, reports Agence France-Presse.
The Republican billionaire -- who for 10 days has been sounding out cabinet picks at his Trump Tower offices in New York -- made the pledge in a short video message.
The 70-year-old property tycoon outlined a list of priorities for his first 100 days and executive actions to be taken ‘on day one’ -- on half a dozen issues from trade to immigration, national security and ethics -- in a push to ‘reform Washington and rebuild our middle class.’
‘My agenda will be based on a simple core principle: putting America first,’ said the president-elect, whose campaign tapped the anger of working-class Americans who feel left behind by globalization. It singled out trade deals such as the TPP as key culprits.
‘On trade, I am going to issue our notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country,’ said Trump, who takes office January 20.
‘Instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores,’ he said.
Both the 12-nation TPP -- signed in February but not yet in force -- and the 1994 North American Free Trade Agreement featured heavily in the brutal White House race. Trump said they harmed the US economy and jobs and many see his victory as a repudiation of ever-deeper commercial ties.
Trump’s populist election platform called for scuttling the TPP -- President Barack Obama’s signature trade initiative which still needs approval from the Republican-dominated Congress -- as well as for renegotiating NAFTA.
Asian leaders have been scrambling to save the trade pact.
As Donald Trump has pulled the plug on TPP, proponents of the pact said on Tuesday that the move would open the way for China to assume the leadership mantle on trade, reports Reuters.
Japan and Australia expressed their commitment to the pact on Tuesday, hours after Trump vowed to withdraw from the 12-nation Trans-Pacific Partnership on his first day in office, calling the deal ‘a potential disaster for our country.’
Trump’s declaration appeared to snuff out any hopes for the deal, a signature trade initiative of President Barack Obama, five years in the making and meant to cover 40 percent of the world economy.
The TPP, which aims to cut trade barriers in some of Asia’s fastest-growing economies and stretch from Canada to Vietnam, can’t take effect without the United States. It requires the ratification of at least six countries accounting for 85 percent of the combined gross domestic product of the member nations.
Japanese Prime Minister Shinzo Abe said ‘the TPP would be meaningless without the United States,’ even as parliament continued debating ratification and his government vowed to lobby other members to approve it.
Yet even without US ratification, the TPP won’t just die, a senior Japanese official said.
‘It just continues in a state of not being in effect,’ said Shinpei Sasaki of the Cabinet Office’s TPP
headquarters. ‘In the future if the United States takes the procedures and it passes Congress, that would satisfy the provisions and the TPP would go into effect.’
Other members of the 12-nation grouping could conceivably work around a US withdrawal.
Australian Trade Minister Steven Ciobo told reporters in Canberra countries could push ahead with the TPP without the United States by amending the agreement and possibly adding new members.
‘We could look at, for example, if China or Indonesia or another country wanted to join, saying, ‘Yes, we open the door for them signing up to the agreement as well.’’
But Singapore’s Prime Minister Lee Hsien Loong said reopening negotiations wouldn’t be easy. ‘If you sign a fresh agreement, you have to go through it again. We haven’t crossed that bridge yet. We’ll cross it if and when we come to that.’
China has pushed its own version of an Asia-Pacific trade pact, called the Regional Comprehensive Economic Partnership (RCEP), which notably excludes the United States. It is a more traditional trade agreement, involving cutting tariffs rather than opening up economies and setting labor and environmental standards as TPP would.
The RCEP was a focus of attention at the Asia Pacific Economic Cooperation summit in Peru over the weekend.
Tan Jian, a senior member of China’s delegation at the summit, said more countries are now seeking to join its 16-member bloc, including Peru and Chile, and current members want to reach a deal as soon as possible to counter rising protectionism.
China’s foreign ministry said on Tuesday Beijing has an ‘open attitude’ toward any arrangements that promote free trade in the region as long they don’t become ‘fragmented and politicized’.
Foreign ministry spokesman Geng Shuang said the RCEP was an initiative led by the 10-member Association of Southeast Asian Nations (ASEAN), which China has been promoting. ‘We are willing to keep pushing the (RCEP) talks process with all sides to achieve positive progress at an early date,’ he said.
Vietnam last week shelved its own ratification of TPP, after Obama abandoned efforts to push it through a lame-duck Congress, while Malaysia has shifted its attention to the RCEP.
Matthias Helble, a research economist at the Asian Development Bank Institute in Tokyo, said Trump’s announcement that bilateral trade deals would replace TPP ‘comes at a high cost,’ adds AFP.
‘The outcome of ten years of hard-fought negotiations has been jettisoned,’ Helble said.
‘The only glimmer of hope is that Trump is not fully abandoning the idea of trade opening.’
Trump’s pledge to pull out of the deal was one of six points on which he promised immediate executive action -- which he can take without Congressional approval.
Trump said he would direct the Department
of Labor to investigate abuses of visa programs ‘that undercut the American worker.’
On energy, he pledged to boost the oil and gas sector and bring back coal.
Trump also said he would ask defense officials to create plans to protect the US ‘from cyber-attacks and all other form of attacks.’
Sticking to his central pledge to cut government red tape, he promised ‘a rule which says that for every one new regulation, two old regulations must be eliminated.’
Though his own transition team includes several lobbyists, the Republican also promised ‘a five-year ban on executive officials becoming lobbyists after they leave the administration.’
There was no mention in the message of some of Trump’s biggest campaign promises -- notably his pledge to build a wall along the Mexican border, deport millions of immigrants, restrict Muslim immigration and repeal the Obamacare health care law.
The video was issued as the stream of would-be appointees continued at his New York headquarters. The day’s talk focused on the possible nomination of retired general James ‘Mad Dog’ Mattis as secretary of defense.
Despite the 66-year-old Marine’s renowned frankness -- ‘Be polite, be professional, but have a plan to kill everyone you meet’ -- he enjoys warm support in Washington and should sail through confirmation.
After Mattis, Trump’s other choices may prove more complicated, such as that for secretary of state. This is reportedly between former Massachusetts governor Mitt Romney and former New York mayor Rudy Giuliani, both of whom met Trump over the weekend at his golf club in New Jersey.
After meeting potential hires, Trump hosted private talks with a group of top US news anchors and executives -- with whom he repeatedly feuded during the campaign.
Trump also suggested that Nigel Farage, the co-founder of the nationalist UK Independence Party, should become Britain’s ambassador to the US.
‘Many people would like to see @Nigel_Farage represent Great Britain as their Ambassador to the United States,’ the Republican tweeted. ‘He would do a great job!’
Late on Tuesday or early on Wednesday, Trump is to fly to his Mar-a-Lago resort in Florida to take a ‘brief’ Thanksgiving holiday break with his family.

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