Is U.S. being left behind?
The 12-member Trans-Pacific Partnership (TPP) has a new, more awkward name, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPATPP), and one less partner, Donald Trump’s U.S.A.
The Pacific trade agreement also appears now to have a new lease on life even if it affects a smaller share of the world economy. It’s a much smaller deal without the U.S. and scaling back the details is likely part of work remaining to complete the proposed agreement.
Certainly, that’s the impression of Dairy Farmers of Canada, whose new president, Pierre Lampron, issued a congratulatory message Saturday to Prime Minister Justin Trudeau for his “courage” in holding out for further talks. Although the ministerial statement didn’t mention agricultural trade specifically, Lampron clearly expects any new deal will involve less market access for dairy imports to Canada than the 3.25 per cent market share provided originally in TPP.
The revival of Pacific trade talks also shows other nations continue to favour broader initiatives and raises further confusion about the isolationist drift of current U.S. policy. Then, again, any discussion of the Trump presidency must consider the possibility that there is no organizing principle.
Recent commentary on the anniversary of Trump’s election has reached a level of high ridicule. The November issue of Vanity Fairy includes a letter from Editor Graydon Carter that ponders the pending end of Trump’s presidency. So toxic has the commentary become, it’s possible to begin feeling sorry for the president.
“The man who came to Washington claiming that he would drain the swamp will, when he exits, leave the city -- and the nation -- high and dry, save for a clump of yellow hair clogging the drain,” Carter’s letter concludes. Now that’s harsh.
Even so, it is hard to understand the sense of an increasingly isolationist U.S. trade policy under a president who keeps talking about the importance of open trade while erecting barriers wherever he goes.
Trump has expressed a preference for bilateral agreements. He has shown little progress so far on bilateral agreements, however, even as he tears up existing multilateral arrangements. To cite a ready example from agriculture, Japan boosted tariffs in July on frozen beef imports under existing law from countries without a reciprocal free trade agreement.
That includes the U.S. which holds by far the largest share of Japan’s beef export market. In response to the beef tariff boost, U.S. Agriculture Secretary Sonny Perdue issued a statement of concern about its impact on U.S. beef exports to Japan worth about $1.5 billion last year.
Earlier this month, the U.S. Department of Agriculture’s Foreign Agricultural Service published a report warning of the impact of a future trade deal between Japan and the remaining 11 Pacific partnership nations on U.S. pork exports. In 2016, Japan was the leading export market for U.S. pork valued at $1.6 billion.
The U.S. is by far the top exporter of fresh pork to Japan with 58 per cent of the market. But this is where it gets complicated because America’s partners in NAFTA stand to gain from Trump’s game of musical trade partners.
Both Canada, which has increased its share of the Japanese pork marketplace to 39 per cent in recent years, and Mexico, where exporters sourced about three per cent of Japan’s supply, remain part of the evolving Pacific partnership.
A recent Japan Times editorial argues the goal of 11 remaining Pacific partnership nations should be “to bring the U.S. back to the pact.” No doubt many U.S. policy makers and electors would agree.
Canada's Trade Minister FranÁois-Philippe Champagne, right, attends the Trans Pacific Partnership (TPP) Ministerial Meeting ahead of the Asia-Pacific Economic Cooperation (APEC) leaders summet in the central Vietnamese city of Danang on November 9, 2017. World leaders and senior business figures are gathering in the Vietnamese city of Danang this week for the annual 21-member APEC summit.
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