Trump changes tack on TPP

Donald Trump’s sudden decision on April 12 to investigate options for the US to recommit to the Trans-Pacific Partnership agreement – barely 16 months after he unilaterally withdrew the country from the 12-nation alliance – has confused even veteran observers of US trade policy.

“There’s no deadline. We’ll pull a team together, but we haven’t even done – I mean it just happened a couple hours ago,” Larry Kudlow, director of the National Economic Council and one of the two members of Mr Trump’s economic team deputed to study the issue, told the New York Times. The other member of the economic team is US trade representative Robert Lighthizer.

Within hours, Mr Trump tweeted a follow-up: “Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama.”

Trump’s hasty decision seems to have been motivated partly by an effort to appease farmers furious at his decision to impose steep tariffs on some Chinese imports, which led China to retaliate by imposing sharp tariff increases on US pork and other agricultural products, and threatening 25% tariffs on key US exports such as soybeans, corn, wheat and beef.

However, the prospect of new markets under the TPP being dangled before US producers seems unlikely to become reality in the near term.

For one thing, some trade unions and politicians remain opposed to the TPP, seeing it as a further attack on US workers’ job security. For another, after five years spent reaching agreement on the TPP, and another modifying it after the US withdrawal, “no one is likely to be in any mood to consider new demands by the US”, said Deborah Elms, executive director of the Asian Trade Centre in Singapore and an expert on the TPP.

Instead, the 11 countries that went ahead without the US to sign up for Comprehensive and Progressive Agreement for Trans-Pacific Partnership – a modified version of the TPP that omits 22 provisions insisted on by Obama administration negotiators over the strong objections of other countries – are aiming to get backing from their national legislators for a start date of January 2019.

"Renegotiation will not only take a long time, but also alter the balance of benefits for parties," said Malaysia’s trade minister, Mustapa Bin Mohamed.

“We’ve got a deal, it’s a good deal. I can’t see that all being thrown open now to appease the US,” said his Australian counterpart, Steve Ciobo.