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Back to the news list Trump Proposes Rejoining Trans-Pacific Partnership
12 April 2018 - Media Release - New York Times

By Ana Swanson

WASHINGTON — President Trump, in a sharp reversal, told a gathering of farm state lawmakers and governors on Thursday morning that he was directing his advisers to look into rejoining the multicountry trade deal known as the Trans-Pacific Partnership, a deal he pulled out of days after assuming the presidency.

Rejoining the 11-country pact could be a significant change in fortune for many American industries that stood to benefit from the trade agreement’s favorable terms and Republican lawmakers who supported the pact. The deal, which was negotiated by the Obama administration, was largely viewed as a tool to prod China into making the type of economic reforms that the United States and others have long wanted.

 

 

Both Democrats and Republicans attacked the deal during the president campaign, but many business leaders were disappointed when Mr. Trump withdrew from agreement, arguing that the United States would end up with less favorable terms attempting to broker an array of individual trade pacts and that scrapping the deal would empower China.

Republicans in Congress have also been skeptical of Mr. Trump’s tendencies on trade, and 25 Republican senators sent a letter to Mr. Trump urging him to re-engage with the pact “so that the American people can prosper from the tremendous opportunities that these trading partners bring.”


Mr. Trump had remained sharply critical of the pact and said that he would instead negotiate trade agreements one on one, a tactic he says gives the United States better leverage over its trading partners.

Rejoining the TPP could be a complex task. The remaining 11 countries have spent months renegotiating a pact that lacks the United States market and finally agreed to a sweeping multinational deal this year. Eswar Prasad, a trade expert at Cornell University, said it was difficult to imagine that the United States would be “welcomed with open arms” by the current members or have much leverage in reshaping the deal.

And in the past, the president has floated policies, like cooperating with Democrats on legislation governing immigration and gun rights, that he has subsequently backed down on.

Mr. Trump’s decision to reconsider the deal comes as the White House tries to find ways to protect the agriculture sector, which could be badly damaged by the president’s trade approach.

The risk of an escalating trade war with China has panicked American farmers and ranchers, who send many of their products abroad. China has responded to Mr. Trump’s threat of tariffs on as much as $150 billion worth of Chinese goods by placing its own tariffs on American pork, and threatening taxes on soybeans, sorghum, corn and beef.

 

China’s aggressive response to Mr. Trump’s tariffs is aimed squarely at goods produced in the American heartland, a region that helped send him to the White House. A trade war with China could be particularly devastating to rural economies, especially for pig farmers and soybean and corn growers. Nearly two-thirds of United States soybean exports go to China.

The Trump administration says it has ordered the Agriculture Department to create a program to help farmers hurt by trade. Trade advisers say the department could use a program known as the Commodity Credit Corporation to purchase potentially billions of dollars of crops from American farmers harmed by tariffs.

But such a program would be time-consuming and costly and would come as the budget deficit continues to increase. Many American agriculturalists maintain that the easiest way to help them is to avoid a trade war with China in the first place. And many economists say the best way to combat a rising China and pressure it to open its market is through multilateral trade deals like the Trans-Pacific Partnership, which create favorable trading terms for participants.

“The best thing the United States can do to push back against Chinese cheating now is to lead the other eleven Pacific nations that believe in free trade and the rule of law. It is good news that today the President directed Larry Kudlow and Ambassador Lighthizer to negotiate U.S. entry into TPP,” Senator Ben Sasse, a Nebraska Republican, said in a statement.

Among those who supported the Trans-Pacific Partnership was Mr. Trump’s nominee to head the state department, Mike Pompeo, who said during his confirmation hearing on Thursday that the United States needs “to be deeply engaged” in dealing with China.

On Thursday, Republican senators, congressmen and governors from Iowa, Nebraska, North Dakota, Kansas, Texas and other farming states met with the president to express their concerns.

Republican of Nebraska, said it was “good news” that the president had directed his economic adviser, Larry Kudlow, and his trade negotiator, Robert Lighthizer, to look into rejoining the deal. “The best thing the United States can do to push back against Chinese cheating now is to lead the other 11 Pacific nations that believe in free trade and the rule of law,” Mr. Sasse said in a statement.

Senator Charles E. Grassley, Republican of Iowa, said in a tweet on Thursday that the farm state senators who attended the meeting had each expressed concerns about “nervousness among farmers” because of Chinese retaliation.

 

 

 

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