Last year, the Trump administration withdrew from the Trans-Pacific Partnership (TPP), but is now signaling officials to explore rejoining if only a “substantially better” deal is negotiated.
“Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!” tweeted President Donald Trump on Thursday.
American farmers, in particular, have voiced concerns regarding the recent tariff feud with China. Trump has threatened to imposed tariffs on about $100 billion in Chinese products, but the president is optimistic about the recent negotiations.
“Now we’re really negotiating and I think they’re going to treat us really fairly,” said Trump in a White House meeting with Republican governors and farm-state lawmakers. “I think they want to.”
“He’s going to get rid of a lot of taxes and tariffs,” said Trump about Chinese President Xi Jinping.
“China cheats in lots and lots of ways,” said Sen. Ben Sasse, Nebraska Republican, who attended the meeting. “The single best way we can counter that is by leading all the rule-of-law nations in the Pacific who would rather be aligned with the U.S. than be aligned with China.”
This week, Trump directed both Larry Kudlow, White House Economic adviser and Robert E. Lighthizer, the U.S. Trade Representative to look into rejoining the Asia-Pacific trade pact.
Several lawmakers in farm states in support of the U.S. rejoining the TPP because it would open up more markets to U.S. farming industry.
“That certainly be good news all throughout farm country,” said Sen. Pat Roberts, Kansas Republican and chairman of the Senate Agriculture Committee.
After the U.S. dropped out of the TPP last year, 11 nations, including Canada, Japan, Mexico, Australia, and others, signed their own deal.
Some countries don’t seem open to changing the terms.
“We’ve got a deal. It’s a good deal. Eleven countries have signed up and we’re firm on the deal,” said Steve Ciobo, Australian Trade Minister. “I can’t see all that being thrown open now to appease the United States, but we would welcome the U.S. coming back to the table.”
Japan’s Toshimitsu Motegi, who is also the minister in charge of TPP, expressed similar sentiments.
“If these comments mean that President Trump is correctly evaluating the significance and effects of the TPP, then we welcome them,” said Motegi.”The deal is a balanced one, like fine glassware, and it would be extremely difficult to renegotiate or change just one part of it.”
“The U.S. had agreed with TPP-12 and then left, and says it wants more on its return. That is not acceptable—it is against negotiation rules,” said Yorizumi Watanabe, a former Japanese trade negotiator to the Wall Street Journal.
“We have achieved a balanced deal for all parties involved,” said Mustapa Mohamed, Malaysia Trade Minister. “Renegotiation will not only take a long time but also alter the balance of benefits for parties.”
However, other nations like Vietnam seem more open to having the U.S. rejoin.
“U.S. participation in the TPP is still an attractive prospect for many of its members because it would lead to lower tariffs in the huge American market for products like Malaysian palm oil and Vietnamese apparel. Some members, particularly Japan, like the idea of cementing the U.S. economic presence in the region as a bulwark against China,” writes the WSJ. “An October 2017 paper from the Peterson Institute for International Economics estimated that real income in Vietnam and Malaysia would rise by around 8% by 2030 from the 2015 level if the nations were in a TPP deal that included the U.S. The expected gain from an 11-nation TPP without the U.S. was less than half as big.”
According to Sasse, Trump believes that the “TPP might be easier to join now” since the other countries have agreed on their terms. Not to mention, it would involve less negotiating in the future.
“One of the White House officials said that while the president prefers negotiating bilateral trade deals, a multilateral deal with the TPP countries would counter Chinese competition and would be faster than negotiating one-on-one with each of the 11 other nations,” writes Newsmax.
Not everyone is pleased with Trump’s announcement. Rick Manning, president of the conservative Americans for Limited Government said that the decision to reconsider joining the TPP “would be a disaster both for our nation and for President Trump,who won the election promising to get out of this deal.”
Author’s note: This all appears to be part of Trump’s negotiating tactic. China doesn’t want the U.S. to be part of the TPP. We will see if the TPP nations are really set on the current agreement or they are just taking a hard stance.