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Trump wavers on membership for U.S. in Pacific nations deal

 

By JORDAN STRICKLER

WASHINGTON, D.C. — In the ongoing saga of the Trans-Pacific Partnership (TPP), President Donald Trump has re-introduced possible U.S. participation into the mix.

Opting out of the pact – a pending 12-nation agreement and a signature trade policy of former President Barack Obama – was one of Trump’s first duties as president and a significant plank of his campaign platform. The international trade agreement was also seen by some as a potential exports boon for farmers.

Speaking after a trade meeting with the President on April 12, Republican senators said Trump told White House National Economic Council Director Larry Kudlow and U.S. Trade Representative Robert Lighthizer to look at reentering the agreement.

The second look at the TPP comes amid tariffs from China on some of the United States’ most important crops. The latest tariff is on sorghum, and China stated it would force U.S. exporters to pay a temporary 178.6 percent "deposit" on the cereal grain used in China as feed for cattle and a sweetener in many products, including baijiu, a popular liquor.

“The President multiple times reaffirmed in general to all of us and looked right at Larry Kudlow and said, ‘Larry, go get it done,’” said Nebraska Sen. Ben Sasse of the meeting. Sasse has been a vocal proponent of free trade and was one of 25 Senate Republicans who wrote a letter to Trump in February asking him to rejoin the deal.

However, Trump backed off this position after a meeting with Japanese Prime Minister Shinzo Abe. Following their conversation, Trump tweeted his preference for bilateral trade deals in place of multinational pacts:

“While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States. Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers. Look how bad WTO (World Trade Organization) is to the U.S.”

The inclusion of South Korea confused experts, as it is not part of the 11-nation TPP agreement, which consists of Canada, Mexico, Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam.

Abe seemed to hope to steer Trump back into the TPP instead of negotiating a bilateral deal. Japan has reportedly been reluctant to enter into bilateral trade talks, reasoning that it would be forced to negotiate greater demands than it would in the TPP.

After spending the better part of a year reworking the deal, the 11 remaining nations signed the updated agreement, coined the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in early March. The trade deal will become effective when ratified by six of the signatories, which is expected to happen early next year.

The updated pact will reduce tariffs in countries that together amount to more than 13 percent of the global economy – a total of $10 trillion in gross domestic product (GDP). If the United States had remained in it, that number would have represented 40 percent in global GDP.

A return to the TPP is a move that many agriculture groups vocally favor, including the U.S. Wheat Associates. “Putting it simply, joining TPP is the best way to avoid a potentially devastating loss of wheat sales to Japan,“ said Chair Michael Miller, also a farmer from Ritzville, Wash.

“If the United States joins TPP, U.S. wheat should be able to compete on a level playing field with Canadian and Australian wheat, which will soon have a major advantage once TPP is implemented. That would keep U.S. wheat sales that currently represent 50 percent of Japan’s total wheat imports competitive in this crucial market.”

This was the second time Trump has publicly considered rejoining the pact. Earlier this year, he raised the idea of entering the TPP again during a speech at the World Economic Forum in Davos, Switzerland.

4/25/2018