Trump Revamps US Trade Focus by Pulling Out of Pacific Deal

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J. Scott Applewhite/Pool via Bloomberg News

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President Trump abruptly ended the decades-old U.S. tilt toward free trade by signing an executive order to withdraw from an Asia-Pacific accord that was never ratified and by promising to renegotiate the North American Free Trade Agreement.

鈥淕reat thing for the American worker, what we just did,鈥 Trump said Jan. 23 after signing an order withdrawing the U.S. from the Trans-Pacific Partnership accord with 11 other nations. He didn鈥檛 sign any actions to direct a renegotiation of the Nafta accord with Mexico and Canada, yet he said Jan. 22 that he would begin talks with the two leaders on modifying the accord.

鈥淲e鈥檝e been talking about this a long time,鈥 Trump said.

Trump鈥檚 trade focus fulfills a campaign promise to rewrite America鈥檚 trade policy during his first days as president. 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. By scrapping the Trans-Pacific Partnership accord negotiated by former President Barack Obama, Trump will delight many of his most fervent supporters as well as a good many Democrats, while opening an economic vacuum in Asia that China is eager to fill.



Trump campaigned against the TPP and other trade deals, including Nafta, during his campaign for the White House. In a video released in November, Trump promised to exit TPP 鈥渙n day one,鈥 calling it 鈥渁 potential disaster for our country.鈥

The TPP, a 12-country deal that sought to liberalize trade between the United States and Pacific Rim nations including Japan, Mexico and Singapore, was a signature piece of former President Obama鈥檚 attempt to pivot U.S. global strategy to focus on the fast-growing economies of Asia.

Trump said Jan. 22 that he鈥檒l 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 鈥渢errific鈥 and signaled that he鈥檚 willing to work with the United States鈥 closest neighbors.

鈥淲e鈥檙e going to start renegotiating on Nafta, on immigration and on security at the border,鈥 Trump said at the start of a swearing-in ceremony for top White House staff. 鈥淚 think we鈥檙e going to have a very good result for Mexico, for the United States, for everybody involved. It鈥檚 really very important.鈥

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

David MacNaughton, Canada鈥檚 ambassador to the United States, told reporters his focus is on avoiding Canada's being "collateral damage" in trade actions.

Trump repeatedly criticized the TPP and Nafta on the campaign trail, saying the U.S. manufacturing sector had been hollowed out by bad trade deals. Trump was meeting with business executives in the morning听Jan. 23 and was scheduled to meet later with union leaders on a day the White House cast as focused on trade and job creation. He told the business leaders he intended to impose a 鈥渟ubstantial border tax鈥 on companies that move operations out of the United States.

During his campaign, Trump said he would rework the North American deal to improve trade conditions for the听United States and prevent companies from shipping American jobs abroad. 鈥淚f our partners refuse a renegotiation that gives American workers a fair deal, then the president will give notice of the United States鈥 intent to withdraw from Nafta,鈥 according to a statement on the White House website.

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鈥 approval of 鈥渇ast track鈥 authorization for the agreement in 2015, it was never formally authorized by the听United States. 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听United States would be 鈥渕eaningless.鈥 Still, many 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 鈥渨ould be the death blow鈥 for American factories. 鈥淚t would give up all of our economic leverage to an international commission that would put the interests of foreign countries above our own,鈥 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鈥檛 a part of the TPP. 鈥淪uch an outcome would be cause for celebration among those who favor 鈥楢sia for the Asians鈥 and state capitalism,鈥 the ambassadors wrote in a letter.

Rather than support wide-ranging regional trade agreements, Trump has proposed negotiating bilateral trade agreements. He also听has proposed enacting tariffs on imports to protect domestic manufacturing.

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