Business

Trump to dump TPP on first day in office

by Ayako Mie and Tomohiro Osaki

Staff Writers

U.S. President-elect Donald Trump said on Monday he will withdraw his country from the Trans-Pacific Partnership trade pact on the day he takes office, dealing another blow to Prime Minister Shinzo Abe, who views the 12-nation deal as essential to jump-starting Japan’s teetering economy.

Trump said that he has asked his transition team to develop a list of executive actions his administration can take on day one “to restore our laws and bring back our jobs.” Trump said that his agenda was based on the simple core principle of “putting America first.”

“On trade, I am going to issue our notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country,” he said in a brief video message posted on Twitter and Facebook, outlining priorities for his first 100 days in office.

“Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back onto American shores.”

Trump successfully led his campaign to the White House by stoking anger against globalization and free trade among working-class Americans.

He aggressively targeted the TPP and the North American Free Trade Agreement (NAFTA), saying countries such as Mexico are stealing American jobs.

Around the same time the real estate billionaire released his video message, Abe underscored the crucial role of the U.S. in the trade pact at a news conference in Buenos Aires, where he visited after attending the Asia-Pacific Economic Cooperation summit in Peru.

“There is no meaning in (proceeding) without the United States . . . the fundamental balance of the (TPP’s) benefits would collapse,” Abe said, adding that it is also “impossible” to renegotiate the deal.

Abe became the first global leader to meet with Trump last week after the election, but no details of the discussion have been made public.

During the APEC summit, the leaders of the 21-member nations agreed to fight against the protectionist sentiment that has prevailed since the Brexit vote in July and the rise of Trump.

Although TPP member countries agreed to work together to ensure the ratification of the pact, the focus has somewhat shifted to the Free Trade Area of the Asia-Pacific (FTAAP) that covers the members of the APEC, including China.

New Zealand Prime Minister John Key said that the country is still favoring a TPP without the U.S., but Abe said during a meeting of TPP member nations that there was no point in pursuing the pact without the U.S.

Abe, who has expended significant political capital championing the pact, is especially concerned about the future of the deal, as it is an important pillar of his economic policy to buoy Japan’s economy by introducing the deregulation of goods and services, and attracting more foreign investment to Japan.

It is central to the U.S. rebalancing policy to Asia under President Barack Obama to counter against the increasing influence of China, which is not part of the TPP.

Chief Cabinet Secretary Yoshihide Suga on Tuesday refused to comment on Trump’s video message, saying he is yet to become the president and the current administration is still in place. He said Japan has to take the lead on the TPP, by encouraging the U.S. and other countries to ratify it.

Tokyo had hoped the TPP could be ratified during the lame duck session, but the prospect appears bleak with Senate Majority Leader Mitch McConnell rejecting a vote before Trump takes office.

Meanwhile, Gerald Curtis, Burgess Professor of Political Science at Columbia University, told a news conference in Tokyo on Tuesday that it’s not clear if the U.S. side is absolutely against the TPP.

At the Foreign Correspondents’ Club of Japan, he said there are some slim hopes the situation could turn around because he believes the majority of Republicans in the Senate and the House favor TPP, while Trump opposes it.

“What we’re seeing… is very interesting in that Abe has not listened to the opportunity to say let’s get the other members of TPP — the other 11 of us — to change the ratification clause… Why don’t we do that? He’s talking about the importance of TPP and free trade.”

Curtis said that if Trump sticks to his position to TPP, Abe will try to position himself as the leader of building a free trade regime in East Asia.

“You’ll see Japan playing a leadership role in trying to expand TPP to include what’s called RCEP (Regional Comprehensive Economic Partnership), you know, this regional comprehensive economic partnership idea.

“The upshot of Trump shifting America to a more protectionist policy is that Japan leads the opposition to that movement,” he said.

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