Trump makes good on campaign’s tough trade talk

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Reflecting his deep-seated skepticism about free trade and declaring that the policy of his Administration is “… to represent the American people and their financial well-being in all negotiations, particularly the American worker, and to create fair and economically beneficial trade deals that serve their interests”, President Donald Trump on Monday signed a Memorandum directing the US Trade Representative to withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP)  and to permanently withdraw the US from TPP negotiations.  He also directed the Trade Representative to provide written notification to the Parties and to the Depository of the TPP, as appropriate, and to publish the memorandum in the Federal Register.  Taking these steps effectively kills the TPP deal because it is not economically viable without the participation of the United States.  The withdrawal is a repudiation of what had been a key priority of the Obama Administration.

President Trump said that the intention of his Administration is ” … to deal directly with individual countries on a one-on-one (or bilateral) basis in negotiating future trade deals and he directed the Trade Representative “… to begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.” To that end, President Trump will meet at the White House this Friday with British Prime Minister Theresa May, Trump’s first meeting with a foreign leader since becoming President. Trump and May are expected to discuss beginning talks on a bilateral trade agreement between the United States and the United Kingdom, an agreement that many believe will be difficult to achieve until the United Kingdom completes the Brexit process and leaves the European Union, something that may not occur until as late as March 2019.

Because he believed that this 12-nation Asian-Pacific trade deal would hurt U.S. jobs and was what he once called “a rape of our country”, President Trump had promised throughout the presidential campaign to have the US withdraw from the TPP if he was elected. (He also had pledged in a video released after his election to withdraw from the TPP deal on day one of his presidency.)  Trump’s decision, which is more popular with Congressional Democrats and labor groups than with many Congressional Republicans and business and agriculture groups, prompted praise from several Democrats and criticism from Senator John McCain (R-AZ) who called President Trump’s decision “… a serious mistake that will have lasting consequences for America’s economy and our strategic position in the Asia-Pacific region.”  Senator McCain also argued: “It will create an opening for China to rewrite the economic rules of the road at the expense of American workers. And it will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it.”   

Some observers had expected the president also to issue an executive order today notifying Canada and Mexico of the United States’ intention to withdraw from the North American Free Trade Agreement (NAFTA).  However, at today’s White House press briefing, Trump Press Secretary Sean Spicer said that the United States might be able to renegotiate NAFTA with Canada and Mexico, if these two countries agreed to do so, without the US issuing a notice of intention to withdraw from the agreement.  Thus, while Spicer promised further trade updates later in the week, he said that no further executive orders were expected to be issued today.