TPP, you're fired: Trump says he'll jettison trade deal on Day One
Exiting the TPP will be one of Donald's Trump's "Day One" priorities, the US president-elect says in a video update on his transition to the White House, released today.
“On trade, I’m going to issue a notification of intent to withdraw from the Trans Pacific Partnership – a potential disaster for our country,” Mr Trump says.
“Instead, we will negotiate fair, bilateral [country-to-country] trade deals that will bring jobs and industry back on to American shores.”
The president-elect also signalled he will push for big changes to Nafta, the North American Free Trade Deal covering Canada, the US and Mexico.
Markets were not ruffled. The three main US indices all hit record highs.
The US signed the TPP in February but like other countries involved in the trade pact also required ratification by its law makers.
The complexity of the trade deal meant President Obama was not able to get ratification legislation “legalled” and on to the floor of Congress before the November 8 election.
Last week, he officially suspended efforts to ratify the TPP during the so-called lame duck session of Congress before he leaves office on January 20.
And if there's no US ratification, the TPP cannot come into force (the trade deal requires ratification by countries representing 80% of the GDP of original signatories).
Trump has just released a Presidential Transition video update. He says he will issue an executive action on day one to withdraw from TPP: pic.twitter.com/edEiRnrStJ— NBR (@TheNBR) November 21, 2016
At the Apec summit in Lima, Prime Minister John Key raised the possibility of pushing on with a “TPP minus one” trade deal.
However, given that a lot of TPP is so strongly influenced by the US stance on everything from agriculture to the auto market to big pharma and copyright, it’s likely that any many countries would want to tweak many aspects of a “Son-of-TPP” deal. Pack a lunch.
Free-trade advocates maintain that rather than making the US stronger, its boycott of the TPP, and broad hostility to other multilateral trade deals, will provide China with an opportunity to set the global trade agenda.
China already has its own trade deals with some countries in Asia, as well as Australia and New Zealand.
It is also pursuing its own alternative, the 16-nation Regional Comprehensive Economic Partnership (RCEP).
Meanwhile, free-trade booster Charles Finney says Trump critics need to take a cold shower. The president-elect might not be as bad as they think. And, besides, the US was never that much of a leader on trade liberalisation.