One of the first things Donald Trump did as president was to pull the U.S. out of the Trans-Pacific Partnership trade agreement (TPP). While traveling in Asia, he was accommodating towards China and belligerent in Vietnam. That is the exact opposite of what the Obama administration was attempting to do with TPP—which was designed to work with Pacific rim countries to put pressure on China.
Meanwhile, here’s the big news that surfaced during the president’s trip:
President Trump delivered a fiery speech on trade here Friday, declaring that he would not allow the United States to be “taken advantage of anymore” and planned to place “America first.”
And then, less than 24 hours later, 11 Pacific Rim countries collectively shrugged and moved on without the U.S.
On Saturday, the countries announced they had reached a deal to move ahead with the Trans-Pacific Partnership free-trade pact that Trump threw into question when he withdrew from it earlier this year.
The agreement represents something of a rebuke of Trump, coming near the end of his five-country, 12-day swing through Asia, and reflects the willingness of other nations to proceed without the buy-in of the United States.
It’s not hard to read between the lines and see how this is the opposite of making America great again.
Japan, the world’s third-biggest economy, has assumed the leadership role. Canada, initially a reluctant member of the club, volunteered to host one of the first post-Trump meetings of the remaining TPP countries to work on a way forward — perhaps because research shows that Canadians will do better if they have preferential access that their American cousins lack. Smaller, poorer countries such as Vietnam and Malaysia wanted freer trade with the U.S. but agreed to consider improved access to countries such as Australia, Canada and Japan as a consolation prize for years of hard bargaining.
But to get an idea of just how badly Trump is failing when it comes to trade, take a look at this:
Lower trade barriers. Better protections for intellectual property. More banking transparency.
Those were some of the provisions in the Trans-Pacific Partnership, negotiated by the Obama administration, that Donald Trump bashed on the campaign trail and then withdrew from days after becoming president.
Ten months later, as Trump heads to Vietnam during his trip to Asia, the White House says it is hoping to achieve these goals: Lower trade barriers. Better protections for intellectual property. More banking transparency.
The contradiction exemplifies the muddled U.S. policy that is sending mixed signals to trading partners and already encouraging European nations to jump in and fill the void.
Last spring, Michael Grunwald pointed out that, in attempting to re-netotiate NAFTA with Canada and Mexico, the Trump administration was basically trying to win concessions from those two countries that had been incorporated into the TPP. Now we learn that, in negotiating with other countries involved with TPP, the Trump administration is trying to achieve the same goals that had been part of TPP.
While this president’s massive failures on trade are coming into focus, (1) China is moving forward on their trillion dollar Belt and Road initiative, (2) the 11 other countries involved in TPP are moving forward without the U.S. and (3) the EU is stepping in where we are stepping out.
“If the U.S. withdraws from international and multilateral trade agreements, this creates opportunities for Europe,” said Werner Hoyer, president of the European Investment Bank. “I’m sure the EU would love to deepen its trade relations with NAFTA partners, for example ― countries like Mexico, Canada and the Pacific Rim nations ― and I believe it will seek to do so if the U.S. offers them an opportunity by stepping back.”
“The EU has been extremely aggressive. They are trying to get deals quickly,” Lincicome said. “They understand the competitive advantages that can be achieved.”
Trump talked a lot about trade during the 2016 election. It was obvious then, and even more so now, that he doesn’t have a clue what he’s talking about. He is as ignorant on this topic as he has shown himself to be on many others. As a result, these kinds of failures are going to affect this country’s ability to compete on a global scale and will ultimately have a disastrous impact on our economy in the years (and perhaps decades) ahead.