WASHINGTON/TOKYO - U.S. President Donald Trump said Thursday his administration would consider rejoining the Trans-Pacific Partnership trade deal if the United States is able to strike a “substantially better” agreement.
“I would do TPP, if we made a much better deal than we had,” Trump said from the World Economic Forum in Davos, Switzerland, signaling a shift from his administration’s emphasis on bilateral trade deals over multilateral ones such as the TPP.
It was the first time that Trump has referred to a possible U.S. return to the pending regional free trade agreement, which currently involves Japan, Australia, Canada and eight other Pacific nations.
Trump’s remarks came as the 11 remaining TPP signatories finalized a deal over a so-called TPP 11 on Tuesday in Tokyo with a plan to sign a new pact without the United States on March 8 in Chile, paving the way for it to come into force as early as 2019.
In Tokyo, Deputy Chief Cabinet Secretary Yasutoshi Nishimura said the government will “scrutinize the real motivation behind President Trump’s remark.” If the apparent policy U-turn hinted by Trump means Japan’s effort over the past year to win U.S. understanding of the significance of the multinational pact has paid off, “we would very much appreciate it,” Nishimura said.
“We will consistently explain to Washington that the TPP will work in favor of the American economy and employment, and urge its return to the deal,” Nishimura said, adding that Tokyo will at the moment pursue a swift entry into force of the adjusted version of the trade agreement.
Soon after his inauguration in January last year Trump pulled the U.S. out of the TPP, then a 12-member free trade agreement championed by his predecessor, Barack Obama.
During his presidential campaign, Trump blasted the TPP as a job-killing “disaster.”
“The deal was terrible, the way it was structured was terrible,” Trump said Thursday on the sidelines of the annual meeting in Davos. “If we did a substantially better deal, I would be open to TPP.”
The remarks suggest the Trump administration may call for a renegotiation of the deal — signed by the Obama administration and the 11 countries in February 2016 — with better terms for the United States. The original TPP was never implemented after Washington’s withdrawal.
However, it is not known whether the 11 nations would respond to a potential U.S. request for a renegotiation.
Nishimura asserted the TPP pact is not meant to be renegotiated, likening it to “delicate building blocks” that cannot miss a single piece. “Any tiny change significantly affects the whole structure” of the pact, he said.
Prime Minister Shinzo Abe has underscored the economic and strategic significance of the TPP, a high-standard trade deal that does not involve China, for what would be — if implemented together with the United States — a major component of the economic architecture in Asia and the world.
Since the U.S. withdrawal, Tokyo has led TPP 11 negotiations while hoping that Washington will rejoin the trade deal, in the belief that it is the best framework available.
Reflecting Trump’s “America First” mantra, the U.S. administration has maintained that it can obtain the best outcomes through bilateral deals.
“I like bilateral, because if you have a problem, you terminate,” Trump said Thursday. “You don’t have that same option” with multilateral deals, he added.
However, the administration has not held bilateral trade talks with Japan and other Asian economies to the extent it wishes because many countries in the region would prefer multilateral arrangements such as TPP 11.
Obama had led 12-nation talks that sealed the TPP, pledging to write high-standard trade rules for the region as the centerpiece of his policy of a strategic rebalance to Asia in response to the rise of China.
The eight other TPP members are Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.