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Trump Withdraws U.S. from Trans-Pacific Partnership

Tuesday, January 24, 2017
Sandler, Travis & Rosenberg Trade Report

President Trump reportedly signed Jan. 23 a presidential memorandum fulfilling a campaign pledge to withdraw the United States from the Trans-Pacific Partnership. Trump’s action appears to ensure that the TPP, which was signed nearly a year ago, will not take effect because U.S. participation was essential to its implementation. However, press reports indicate that Trump has signaled his openness to negotiating individual free trade agreements with TPP members and other countries.

Several key lawmakers opposed the withdrawal. Sen. John McCain, R-Ariz., called the withdrawal “a serious mistake” that will “forfeit the opportunity to … open new markets” and “create an opening for China to rewrite the economic rules of the road.” House Ways and Means Committee Chairman Kevin Brady, R-Texas, acknowledged that TPP “fell short” in some ways but called on the Trump administration to “identify what should be improved and quickly act on a strategy that creates more economic opportunities for America in [the Asia-Pacific] region.” Reps. Jim Himes, D-Conn., Rick Larsen, D-Wash., and Gregory Meeks, D-N.Y., leaders of the New Democrat Coalition, said that “hastily withdrawing from agreements like TPP cedes American leadership not only economically, but also geopolitically” and that without such leadership “we will not see strong labor and environmental standards, protection for intellectual property and restrictions on state-owned enterprises.”

Senate Finance Ranking Member Ron Wyden, D-Ore., added that it was a “bad sign” that the presidential memo was not immediately made public, which he said contravened the requirements in the Trade Facilitation and Trade Enforcement Act for the president to “consult closely and on a timely basis with Congress and keep members fully apprised of trade negotiations.”

Others supported the withdrawal and expressed optimism that it could herald similar efforts in the future. Sen. Sherrod Brown, D-Ohio, said “throwing out TPP is the first necessary step in overhauling our trade policy” and called on Trump to make good on his pledge to renegotiate NAFTA as well. Ways and Means Ranking Member Richard Neal, D-Mass., said the TPP withdrawal “must be a first step” toward “new rules and better enforcement to make trade a two-way street, particularly in the Asia-Pacific region.”

However, Lori Wallach, director of Public Citizen’s Global Trade Watch, pointed out that Trump’s memo “did not end talks to establish the Transatlantic Trade and Investment partnership, the Trade in Services Agreement and the U.S.-China Bilateral Investment Treaty, all of which would replicate and expand the TPP/NAFTA model Trump says he is ending.” She added that “many people Trump has named to senior positions passionately support the very agreements Trump opposes.” A policy statement on the White House website indicates that Trump is not opposed to negotiating new trade agreements but states that they must be “in the interests of American workers.”

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