Leaving TPP Was ‘Strategic Blunder,’ Says Former U.S. Trade Rep

Bloomberg, November 5, 2017, By Connor Cislo and Maiko Takahashi

The Trump administration’s decision to withdraw from the Trans-Pacific Partnership trade agreement will cost the U.S. access to markets in the Asia-Pacific and make it easier for China to advance its own vision for the region, said Michael Froman, who served as the U.S. Trade Representative under President Obama.

Froman, who led U.S. negotiators in the creation of the multilateral trade pact, said in an interview on Friday that the nation would become less competitive in the region as other countries move ahead with their own trade agreements. President Donald Trump withdrew the U.S. from the TPP early in his administration, and has stated a preference for pursuing bilateral trade deals. Froman characterized the move as a retreat of U.S. leadership in the Asia-Pacific.

“I think the Trump administration has put the thumb on the scale in terms of a China-centric Asia-Pacific,” he said. That’s “not in the interest of an open, free and rules-based global trading system.”

Froman, who is now a fellow at the Council on Foreign Relations, spoke ahead of Trump’s first presidential visit to the region, a trip that includes meetings with leaders from Japan, China, South Korea and Vietnam. He expects security concerns related to North Korea to be the “dominant issue” in most of the countries the president visits.

Trump’s Trip

But there will still be pressure on economic issues. “When there are trips by presidents, there’s always a search for deliverables,” said Froman. He pointed to agreements previously reached between Japan and the U.S. in the TPP negotiations as “available to take off the shelf” if the two countries want to produce concrete results.

In a separate interview on Bloomberg TV, Froman said policy makers in Asian countries would be watching Trump’s visit to see if the U.S. is withdrawing from the region, or for its alternative vision to the TPP, if it plans to stay engaged.

Speaking to business leaders in Tokyo on Monday, Trump reaffirmed his decision to pull the U.S. out of the trade agreement. “TPP was not the right idea,” Trump said. “I’m sure some of you in this room disagree, but ultimately I’ll be proven right.”

Talk of a bilateral trade agreement may come up during Trump’s meeting with Japanese Prime Minister Shinzo Abe, Froman said, but both countries have much more preparation to do before work on such an agreement could begin in earnest.

Japan’s Stance

U.S. negotiators will be kept busy for some time with talks on the North American Free Trade Agreement and the U.S.-Korea Free Trade Agreement. Japan, for its part, is watching the substance and style of the Trump administration’s negotiations before making its own commitments, he added.

“The renegotiation of Nafta really is the Trump administration’s first opportunity to make clear and make specific what it considers to be good trade policy,” he said. “That will inform Japan’s decision as to whether it wants to invest the time and political capital” in negotiating a bilateral trade deal.

Froman also praised the TPP-11 initiative, an effort by other TPP countries to enact the agreement without the U.S.

The TPP-11 countries are expected to consider ways to move the pact forward at the Asia-Pacific Economic Cooperation leaders’ meeting in Vietnam later month.