The U.S. Wants Back in the TPP? Good Luck With That.
April 3, 2018 at 10:42
The U.S. Wants Back in the TPP? Good Luck With That.
Asia is moving on without America when it comes to trade — and could be better off for it.
BY KEITH JOHNSON |
With the U.S. bailing out, the remaining 11 countries forged ahead and signed a revised Pacific trade pact in Santiago, Chile, Mar. 8, 2018. (Claudio Reyes/AFP/Getty Images)
More than a year after withdrawing from a big Asia-Pacific trade pact, the Trump administration keeps talking about rejoining it on its own terms. But the Asia-Pacific countries that were eager a year ago to hold the door open for the United States are now busy building their own trading order — without Washington at all.
Treasury Secretary Steven Mnuchin is the latest Trump administration official to talk up the prospect of returning to the Trans-Pacific Partnership, the sprawling trade deal that was the centerpiece of the Obama administration’s pivot to Asia and the first target of U.S. President Donald Trump’s demolition job.
Earlier this month, speaking in Chile, Mnuchin said Washington would “definitely” be open to rejoining the pact — once all the administration’s other trade deals were taken care of, and provided the trade accord could be rewritten to be more beneficial to the United States. (U.S. trade officials declined to say what those revised conditions might be.)
And Larry Kudlow, a former television commentator who was named Trump’s top economic adviser, said this month that the United States could lead a “trade coalition of the willing” to counter China’s trade heft and abuses — almost the very definition of the TPP that Trump walked away from early in his presidency.
But that ship seems to have sailed. The remaining 11 countries from the original TPP signed a slightly slimmed-down version of the accord earlier this month in Chile, suspending a score of controversial provisions that the United States had insisted upon. Member countries are already in the process of ratifying the deal, which could go into effect early next year.
Many of the member states shudder at the idea of re-opening contentious, yearslong negotiations just to try to coax the United States back into the club.
Many of the member states shudder at the idea of re-opening contentious, yearslong negotiations just to try to coax the United States back into the club.
Chile’s outgoing president said last month that Washington would have to take the revised deal as is if it wanted back in. And a top Canadian trade official said the United States would get no special treatment if it wanted to rejoin. Even Japan, which wants the United States back in, warnsWashington against renegotiating the whole thing.
“Is there a chance in hell anyone wants to reopen the thing to get the U.S. back in? Not under a Trump administration,” says Mike Callaghan, a former Australian Treasury official and economic advisor to the prime minister, now at the Lowy Institute, a Sydney-based think tank.
That’s partly because many countries in the Asia-Pacific region are already inking new, ambitious trade deals left and right even as the Trump administration struggles to tweak existing pacts such as the North American Free Trade Agreement and the free trade deal with South Korea.
Japan, Australia, and New Zealand are close to signing free trade deals this year with the European Union. Canada just did the same, and Mexico is close to its own deal with the EU, while Southeast Asian nations hope to sign their own EU deal. Singapore, meanwhile, is inking trade pacts with a bevy of Latin American countries.
But domestic politics also play a big part in the reluctance to open up the Trans-Pacific Partnership all over again. Countries such as Japan, Australia, and Vietnam first had to sell their publics on the original deal — which included a lot of unpopular provisions Washington insisted on — only to see the pact’s sponsor back out early last year. Then they had to salvage an 11-member pact during another year of tough negotiations that only concluded at the beginning of this year.
“They’ve designed a deal they are determined to put into effect,” says Wendy Cutler, who spent three decades as a U.S. trade negotiator, including leading talks on the TPP. “They’ve gone through two traumatic episodes. There’s not much stomach for more,” says Cutler, now vice president of the Asia Society Policy Institute.
