The version of “The Apprentice” in Washington, D.C., right now – with The Donald himself facing questions about his loyalty to the country, the shutdown and collusion with Russia – airs daily on nearly every cable-news channel.
Meanwhile, Trump’s policies, many of them declared via executive order, continue to have real-world effects. Nowhere is this truer than with his January 2017 memorandum pulling the U.S. out of the Trans-Pacific Partnership. The long-negotiated 12-nation trade pact would have comprised some 40 percent of global GDP and was largely designed to counter China’s growing economic strength and disregard for the rules of international trade.
Most Americans might not realize it, but the TPP didn’t go away when the U.S. pulled out. The remaining 11 nations – including Australia, Canada, Japan, Mexico, New Zealand and Singapore – ratified the pact, easing investment restrictions, slashing tariffs on agricultural and industrial imports, and strengthening intellectual property rights.
Without the U.S., what is now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is not nearly as large (now 13 percent of world GDP) or as powerful as it would have been. But it has succeeded in eliminating trade barriers in an economic bloc of some 500 million people. And it will give all 11 members far more leverage in negotiations with China.
It is set to grow even larger. The U.K., South Korea, Thailand, Columbia and Indonesia have all expressed interest in joining the pact, which held a meeting in Tokyo last weekend to discuss plans for expansion.
This alone would be bad news for U.S. farmers, manufacturers, the oil and gas industry, and just about anyone in America who exports their products. But coupled with Trump’s tariffs against China – the world’s second-largest economy – the pain is magnified for U.S. producers and consumers alike.
While campaigning for the presidency, Trump called the TPP – a trade pact that was by no means perfect but had been painstakingly negotiated by U.S. trade representatives since 2010 – a “disaster” that was being “pushed by special interests who want to rape our country.” Would the president include American farmers among those “special interests”?
It’s time to end the incendiary rhetoric and return the U.S. to its hard-won role as a founding leader in multilateral trade agreements. Recent reports that the Trump administration is considering loosening or eliminating tariffs against China as an incentive to close a deal by March 1 are welcome signs of progress. Yet even a strong bilateral deal is not the ideal solution.
There’s something even greater at risk here – America’s foundational role in the international trading system. As former U.S. Trade Representative Robert Zoellick told us last week: “Without U.S. leadership, the system is likely to fail to adapt to a changing economy. The usual frictions are more likely to escalate. Risks to the international economy will increase ... The U.S.’s greatest strength has been its ability to build coalitions and institutions that reflect U.S. interests and values.”
By turning away from these trade pacts and alliances, Zoellick said, “we risk undermining our own heritage.”