Trump revamps US trade focus by pulling out of Pacific deal

Herald staff and news services

WASHINGTON, D.C. — For decades, the U.S. has pushed for greater free trade around the globe. That ended Monday, when President Donald Trump signed an executive order pulling America out of a sweeping free trade proposal with several Asian and Pacific countries.

Instead, the country will pursue trade deals with individual countries to get the best terms for American workers, he said in the executive order to withdraw the U.S. from the Trans-Pacific Partnership (TPP) accord with 11 other nations.

“Great thing for the American worker, what we just did,” he said after signing the order.

On Sunday, he promised to renegotiate the North American Free Trade Agreement. He did not sign any orders to open talks with NAFTA’s other two signatories — Mexico and Canada.

The order to leave the TPP drew mixed reactions in Washington state, where international trade is a major economic driver.

The trade deal could have meant thousands more jobs and billions of dollars more exports moving through Washington’s ports, the Washington Council on International Trade — a pro-trade business group — said in a statement.

“The TPP moved us forward in so many positive ways,” and allowed U.S. companies to sell goods and services on more equal terms in foreign markets, WCIT President Lori Otto Punke said in the statement. “The TPP would have also enabled the U.S. to take on a leadership role in the fast-growing Asia-Pacific region.”

A wide range of businesses in Washington — including fruit growers and aerospace industry suppliers — have backed the proposal. Former Boeing CEO and Chairman Jim McNerney endorsed TPP two years ago and called Trump’s comments on trade a “very dangerous discussion.” He has been quiet on the matter since joining the president’s informal kitchen cabinet last year.

Another group, the Washington Fair Trade Coalition declared: “This moment is an historic opportunity to rewrite the global rulebook, ensuring that trade policy works for all of us.”

The coalition, which includes labor and environmentalists, has been skeptical of the TPP’s benefits for hourly workers. Like many opponents, including the Machinists union, the group criticized the deal as being heavily shaped by corporations.

The moves made good on Trump’s campaign promises to rewrite American trade policy with a narrower focus on national interest, specifically how trade deals affect wage earners. On the campaign trail, he railed against globalization and free trade, blaming the economic shifts for hollowing out American manufacturing.

In a video released in November, Trump promised to exit TPP “on day one,” calling it “a potential disaster for our country.”

In declaring his determination to renegotiate NAFTA, Trump would rework an agreement that has governed commerce in much of the Western hemisphere for 22 years. Reactions to Trump’s decision to scrap the TPP highlight his populist bent and his nontraditional mix of political positions. Trump’s opposition to the TPP puts him at odds with many fellow Republican Party members and finds him on common ground with some leftist groups.

The proposal had been a central policy effort during former President Barack Obama’s tenure. However, many Democratic lawmakers, such as Rep. Rick Larsen, expressed reservations with the deal, and others opposed it outright.

The withdrawal of the U.S. creates an opening for China to take on a greater role setting the economic agenda in Asia. The TPP, a 12-country deal that sought to liberalize trade between the U.S. and Pacific Rim nations including Japan, Mexico and Singapore, was a signature piece of former Obama’s attempt to pivot U.S. global strategy to focus on the fast-growing economies of Asia. The expansive proposal was meant to ease trade barriers while raising environmental, labor and intellectual property standards, among others.

Trump said Sunday that he’ll meet with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto to begin discussing NAFTA, which he has routinely blamed for the loss of U.S. jobs. The newly sworn-in president praised Mexico for being “terrific” and signaled that he’s willing to work with the U.S.’s closest neighbors.

“We’re going to start renegotiating on NAFTA, on immigration, and on security at the border,” Trump said at the start of a swearing-in ceremony for top White House staff. “I think we’re going to have a very good result for Mexico, for the United States, for everybody involved. It’s really very important.”

Officials in Canada, which is the biggest buyer of U.S. exports, have indicated they want to avoid getting entangled with the Trump administration’s targeting of imports from Mexico and China. The three countries are the biggest trading partners of the U.S.

After years of negotiations by both Republican and Democratic administrations, NAFTA was signed by then-President Bill Clinton in 1993, and went into effect the following year. The pact sought to eliminate trade barriers between the North American countries, as well as protect intellectual property.

As far as the Trans-Pacific deal, despite Congress’s approval of “fast track” authorization for the agreement in 2015, it was never formally authorized by the U.S. Lawmakers from both sides of the aisle said they grew increasingly concerned it would result in a loss of American jobs.

The future of the TPP is now in flux. Japanese Prime Minister Shinzo Abe said in November that TPP without the U.S. would be ”meaningless.” Still, multiple signatory countries including Vietnam and Australia have said they would stick to the deal even without the leading party of the agreement.

Trump made trade one of the central issues of his campaign, which found success in the former industrial areas of states such as Wisconsin and Michigan. Both states were often considered strongly Democratic before they flipped to Trump in 2016.

In a June speech in Pittsburgh, Trump attacked the deal, which he said “would be the death blow” for American factories. “It would give up all of our economic leverage to an international commission that would put the interests of foreign countries above our own,” he said.

In the final days of the Obama administration, six U.S. ambassadors in Asia attempted to push for a last-minute vote on the pact, which they said if abandoned would cede international leadership to China, which isn’t a part of the TPP. “Such an outcome would be cause for celebration among those who favor ‘Asia for the Asians’ and state capitalism,” the ambassadors wrote in a letter.

The Associated Press and Bloomberg News contributed.

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