Friday Nov 29, 2024
Friday Nov 29, 2024
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Reuters: U.S. President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies, as China’s influence in the region rises.Fulfilling a campaign pledge to end American involvement in the 2015 pact, Trump signed an executive order in the Oval Office pulling the United States out of the 12-nation TPP.
Trump, who wants to boost U.S. manufacturing, said he would seek one-on-one trade deals with countries that would allow the United States to quickly terminate them in 30 days “if somebody misbehaves.”
“We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country,” the Republican president said as he met with union leaders in the White House’s Roosevelt Room.
The TPP accord, backed heavily by U.S. business, was negotiated by former Democratic President Barack Obama’s administration but never approved by Congress.
Obama had framed TPP, which excluded China, as an effort to write Asia’s trade rules before Beijing could, establishing U.S. economic leadership in the region as part of his “pivot to Asia.”
China has proposed a Free Trade Area of the Asia Pacific and has also championed the Southeast Asian-backed Regional Comprehensive Economic Partnership.
Trump has sparked worries in Japan and elsewhere in the Asia-Pacific with his opposition to the TPP and his campaign demands for U.S. allies to pay more for their security.
His trade stance mirrors a growing feeling among Americans that international trade deals have hurt the U.S. job market. Republicans have long held the view that free trade is a must, but that mood has been changing.
“It’s going to be very difficult to fight that fight,” said Lanhee Chen, a Hoover Institution fellow who was domestic policy adviser to 2012 Republican presidential nominee Mitt Romney. “Trump is reflecting a trend that has been apparent for many years.”
Harry Kazianis, director of defence studies at the Center for the National Interest think tank in Washington, said Trump must now find an alternative way to reassure allies in Asia.
“This could include multiple bilateral trade agreements. Japan, Taiwan and Vietnam should be approached first as they are key to any new Asia strategy that President Trump will enact,” he said.
Trump is also working to renegotiate the North American Free Trade Agreement to provide more favourable terms to the United States, telling reporters he would meet leaders of NAFTA partners Mexico and Canada to get the process started.
The new president met with a dozen American manufacturers at the White House on Monday, pledging to slash regulations and cut corporate taxes - but warning them he would take action on trade deals he felt were unfair.
Trump, who took office on Friday, has promised to bring factories back to the United States - an issue he said helped him win the Nov. 8 election. He has not hesitated to call out by name companies he thinks should bring outsourced production back home.
He said those businesses that choose to move plants outside the country would pay a price. “We are going to be imposing a very major border tax on the product when it comes in,” Trump said.
He asked the group of chief executives from companies including Ford Motor Co, Dell Technologies Inc, Tesla Motors Inc and others to make recommendations in 30 days to stimulate manufacturing, Dow Chemical Co Chief Executive Officer Andrew Liveris told reporters.
Liveris said the CEOs discussed the border tax “quite a bit” with Trump, explaining “the sorts of industry that might be helped or hurt by that.”
“Look: I would take the president at his word here. He’s not going to do anything to harm competitiveness,” Liveris said. “He’s going to actually make us all more competitive.”
At part of the meeting observed by reporters, Trump provided no details on how the border tax would work.
The U.S. dollar fell to a seven-week low against a basket of other major world currencies on Monday, and global stock markets were shaky amid investor concerns about Trump’s protectionist rhetoric.
“A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States - that’s not going to happen,” he said.
The president told the CEOs he would like to cut corporate taxes to the 15% to 20% range, down from current statutory levels of 35% - a pledge that will require cooperation from the Republican-led U.S. Congress.But he said business leaders have told him that reducing regulations is even more important.
“We think we can cut regulations by 75%. Maybe more,” Trump told business leaders.
“When you want to expand your plant, or when Mark wants to come in and build a big massive plant, or when Dell wants to come in and do something monstrous and special – you’re going to have your approvals really fast,” Trump said, referring to Mark Fields, CEO of Ford.
Fields said he was encouraged by the tone of the meeting.
“I know I come out with a lot of confidence that the president is very, very serious on making sure that the United States economy is going to be strong and have policies - tax, regulatory or trade - to drive that,” he said.
Trump told the executives that companies were welcome to negotiate with governors to move production between states.
Reuters: Australia and New Zealand said on Tuesday they hope to salvage the Trans-Pacific Partnership (TPP) by encouraging China and other Asian nations to join the trade pact after U.S. President Donald Trump kept his promise to pull out of the accord.
The TPP, which the United States had signed but not ratified, was a pillar of former U.S. President Barack Obama’s pivot to Asia. Japanese Prime Minister Shinzo Abe has touted it as an engine of economic reform, as well as a counter-weight to a rising China, which is not a TPP member.
Fulfilling a campaign pledge Trump signed an executive order in the Oval Office on Monday pulling the United States out of the 2015 TPP agreement and distancing the United States from its Asian allies.
Australian Prime Minister Malcolm Turnbull said he had held discussions with Abe, New Zealand Prime Minister Bill English and Singaporean Prime Minister Lee Hsien Loong overnight about the possibility of proceeding with the TPP without the United States.
“Losing the United States from the TPP is a big loss, there is no question about that,” Turnbull told reporters in Canberra on Tuesday. “But we are not about to walk away ... certainly there is potential for China to join the TPP.”
Obama framed TPP without China in an effort to write Asia’s trade rules before Beijing could, establishing U.S. economic leadership in the region as part of his “pivot to Asia”.
China has proposed a counter pact, the Free Trade Area of the Asia Pacific (FTAAP) and has championed the Southeast Asian-backed Regional Comprehensive Economic Partnership (RCEP).
The TTP, which has been five years in the making, requires ratification by at least six countries accounting for 85% of the combined gross domestic product of the member nations.
Australia help open the possibility of China, the world’s top exporter, joining a revised deal.
“The original architecture was to enable other countries to join,” Australian Trade Minister Steven Ciobo told the Australian Broadcasting Corporation on Tuesday.
“Certainly I know that Indonesia has expressed interest and there would be scope for China if we are able to reformulate it.”
Japan has led the push for the partnership, which also includes Brunei, Canada, Chile, Malaysia, Mexico, Peru and Vietnam.
“There is no change to our view that free trade is the source of economic growth,” Japanese Economy Minister Nobuteru Ishihara told reporters.
When asked whether Japan would be open to negotiating a bilateral trade pact with the United States, Ishihara said it was still uncertain whether U.S. trade officials would start negotiating for such deals.
Trump took office as the 45th president of the United States on Friday and pledged to end what he called an “American carnage” of rusted factories and crime in an inaugural address that was a populist and nationalist rallying cry.
He vowed to bring jobs back by renegotiating what he called bad multilateral trade deals in favour of bilateral deals, with his first move scrapping the TPP.
The U.S. president made comments critical of Japan’s auto exports to the United States and the dearth of U.S. auto exports to Japan, which poses a threat to Japan’s influential car industry.
“We have no tariffs on U.S. cars,” Trade Minister Hiroshige Seko said on Tuesday. “In addition, we do not take any other discriminatory measures against U.S. car imports.”
Australia’s Turnbull said there was still a possibility “that U.S. policy could change over time on this, as it has done on other trade deals,” noting some Republican Party members of congress have been “strong supporters.”
New Zealand trade minister Todd McClay said he had talked with a number of TPP-member ministers when he attended the World Economic Forum in Davos last week and he expected they would meet over the coming months.
“The agreement still has value as a FTA (Free Trade Agreement) with the other countries involved,” McClay said in an emailed statement to Reuters.
