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Trump Orders USTR to Work on Potential Reentry Into TPP
President Donald Trump signaled on Thursday that he’s serious about the U.S. rejoining the Trans-Pacific Partnership as a means to counteract China’s growing influence and leadership along the Pacific Rim.
Trump instructed White House National Economic Council Director Larry Kudlow and U.S. Trade Representative Robert Lighthizer to begin work on a potential U.S. reentry into the trade pact that includes Japan, Vietnam, and nine other countries, said Senator Ben Sasse (R-NE), one of the roughly two dozen lawmakers, governors, and other officials who met with Trump at the White House.
“The best thing the U.S. can do to push back against Chinese cheating now is to lead the other 11 Pacific nations that believe in free trade and the rule of law,” said Sasse. “It is good news that today the president directed Larry Kudlow and Ambassador Lighthizer to negotiate U.S. entry into TPP.”
White House Deputy Press Secretary Lindsay Walters stressed that Trump will want a better deal than what the Obama administration originally agreed to in earlier talks, but gave no details.
“Last year, the president kept his promise to end the TPP deal negotiated by the Obama administration because it was unfair to American workers and farmers,” Walters said in a statement. “The president has consistently said he would be open to a substantially better deal, including in his speech in Davos earlier this year. To that end, he has asked Ambassador Lighthizer and Director Kudlow to take another look at whether or not a better deal could be negotiated.”
Senate Agriculture Committee Chairman Pat Roberts (R-KS) has been a vocal proponent of the U.S. rejoining the trade pact as one of the best ways to help out farmers who continue to struggle with low prices and falling farm income.
“At today’s White House meeting, President Trump listened to those of us who represent farmers and ranchers and heard our call for trade, not aid,” Roberts told Agri-Pulse. “Many of us have called for the administration to engage the nations involved in TPP, whether it is through bilateral or multilateral negotiations. Our producers need markets to sell what we grow, and they need them now.”
Trump dealt a major blow to the U.S. ag sector last year when he followed up on a campaign promise and pulled the U.S. out of the trade pact, which has since been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and implemented by the remaining 11 countries.
The American Farm Bureau Federation was predicting that tariff cuts and other measures in the TPP would net farmers an extra $4.4 billion annually. Japan, for example, had agreed to reduce tariffs and increase market access for U.S. beef, pork, wheat, and other commodities.
“Putting it simply, joining TPP is the best way to avoid a potentially devastating loss of wheat sales to Japan,” said U.S. Wheat Associates Chairman Michael Miller in reaction to Trump’s latest position. “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.”
Both Canada and Australia are members of the CPTPP and the advantage they would get is a much lower tariff.
“Once (CPTPP) is ratified, U.S. wheat exports to Japan will be at serious risk,” the U.S. Wheat Associates and the North American Wheat Growers said in a recent letter to Lighthizer. “(CPTPP) will reduce the effective tariffs that Japanese flour millers pay for imported Australian and Canadian wheat over nine years from about $150 to about $85 per ton. Effective tariffs on imported U.S. wheat would remain at about $150 per ton.”
Rep. David Rouzer (R-NC), who was also in the White House meeting, told Agri-Pulse that the trade pact came up when the conversation turned toward the best ways in which to open up foreign markets for U.S. agriculture and to counter China’s influence.
“We need to be exerting more influence in the area, and trade is a way to do that,” Rouzer said. “We can’t acquiesce to China in the trade environment.”
The decision last year to pull the U.S. out of the trade pact with Japan, Vietnam, Australia, Malaysia, Singapore, Peru, Mexico, Canada, New Zealand, Chile, and Brunei was seen by many as largely benefiting China. The Asian nation is negotiating a separate multilateral free trade agreement with the Philippines, Japan, Australia, India, South Korea, New Zealand, Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Singapore, Vietnam, and Thailand.
Written by Bill Tomson for Agri-Pulse Communications