Trump pulls US out of Pa­cific trade deal

. . . loosens Asia ties as China’s in­flu­ence rises

Lesotho Times - - International -

WASH­ING­TON — US Pres­i­dent Don­ald Trump for­mally with­drew the United States from the TransPa­cific Partnership trade deal on Mon­day, dis­tanc­ing Amer­ica from its Asian al­lies, as China’s in­flu­ence in the re­gion rises.

Ful­fill­ing a cam­paign pledge to end Amer­i­can in­volve­ment in the 2015 pact, Trump signed an ex­ec­u­tive or­der in the Oval Of­fice pulling the United States out of the 12-na­tion TPP.

Trump, who wants to boost US man­u­fac­tur­ing, said he would seek one-on-one trade deals with coun­tries that would al­low the United States to quickly ter­mi­nate them in 30 days “if some­body mis­be­haves.”

“We’re go­ing to stop the ridicu­lous trade deals that have taken ev­ery­body out of our coun­try and taken com­pa­nies out of our coun­try,” the Repub­li­can pres­i­dent said as he met with union lead­ers in the White House’s Roo­sevelt Room.

The TPP ac­cord, backed heav­ily by US busi­ness, was ne­go­ti­ated by for­mer Demo­cratic Pres­i­dent Barack Obama’s ad­min­is­tra­tion but never ap­proved by Congress.

Obama had framed TPP, which ex­cluded China, as an ef­fort to write Asia’s trade rules be­fore Bei­jing could, es­tab­lish­ing US eco­nomic lead­er­ship in the re­gion as part of his “pivot to Asia.”

China has pro­posed a Free Trade Area of the Asia Pa­cific and has also cham­pi­oned the South­east Asian­backed Re­gional Com­pre­hen­sive Eco­nomic Partnership.

Trump has sparked wor­ries in Ja­pan and else­where in the Asia-pa­cific with his op­po­si­tion to the TPP and his cam­paign de­mands for US al­lies to pay more for their se­cu­rity.

His trade stance mir­rors a grow­ing feel­ing among Amer­i­cans that in­ter­na­tional trade deals have hurt the US job mar­ket.

Repub­li­cans have long held the view that free trade is a must, but that mood has been chang­ing.

“It’s go­ing to be very dif­fi­cult to fight that fight,” said Lan­hee Chen, a Hoover In­sti­tu­tion fel­low who was do­mes­tic pol­icy ad­viser to 2012 Repub­li­can pres­i­den­tial nom­i­nee Mitt Rom­ney.

“Trump is re­flect­ing a trend that has been ap­par­ent for many years.”

Harry Kazia­nis, di­rec­tor of de­fense stud­ies at the Cen­ter for the Na­tional In­ter­est think tank in Wash­ing­ton, said Trump must now find an al­ter­na­tive way to re­as­sure al­lies in Asia.

“This could in­clude mul­ti­ple bi­lat­eral trade agree­ments. Ja­pan, Tai­wan and Viet­nam should be ap­proached first as they are key to any new Asia strat­egy that Pres­i­dent

Trump will en­act,” he said.

Trump is also work­ing to rene­go­ti­ate the North Amer­i­can Free Trade Agree­ment to pro­vide more fa­vor­able terms to the United States, telling re­porters he would meet lead­ers of NAFTA part­ners Mex­ico and Canada to get the process started.

Busi­ness lead­ers

The new pres­i­dent met with a dozen Amer­i­can man­u­fac­tur­ers at the White House on Mon­day, pledg­ing to slash reg­u­la­tions and cut cor­po­rate taxes — but warn­ing them he would take ac­tion on trade deals he felt were un­fair.

Trump, who took of­fice on Fri­day, has promised to bring fac­to­ries back to the United States — an is­sue he

said helped him win the Nov. 8 elec­tion. He has not hes­i­tated to call out by name com­pa­nies he thinks should bring out­sourced pro­duc­tion back home.

He said those busi­nesses that choose to move plants out­side the coun­try would pay a price.

“We are go­ing to be im­pos­ing a very ma­jor bor­der tax on the prod­uct when it comes in,” Trump said.

He asked the group of chief ex­ec­u­tives from com­pa­nies in­clud­ing Ford Mo­tor Co, Dell Tech­nolo­gies Inc, Tesla Mo­tors Inc and oth­ers to make rec­om­men­da­tions in 30 days to stim­u­late man­u­fac­tur­ing, Dow Chem­i­cal Co Chief Ex­ec­u­tive Of­fi­cer Andrew Liveris told re­porters.

Liveris said the CEOS dis­cussed the bor­der tax “quite a bit” with Trump, ex­plain­ing “the sorts of in­dus­try that might be helped or hurt by that.”

“Look: I would take the pres­i­dent at his word here. He’s not go­ing to do any­thing to harm com­pet­i­tive­ness,” Liveris said. “He’s go­ing to ac­tu­ally make us all more com­pet­i­tive.”

At part of the meet­ing ob­served by re­porters, Trump pro­vided no de­tails on how the bor­der tax would work.

The US dol­lar fell to a sev­en­week low against a bas­ket of other ma­jor world cur­ren­cies on Mon­day, and global stock mar­kets were shaky amid in­vestor con­cerns about Trump’s pro­tec­tion­ist rhetoric.

“A com­pany that wants to fire all of its peo­ple in the United States, and build some fac­tory some­place else, and then thinks that that prod­uct is go­ing to just flow across the bor­der into the United States — that’s not go­ing to hap­pen,” he said.

Cut taxes and reg­u­la­tions The pres­i­dent told the CEOS he would like to cut cor­po­rate taxes to the 15 per­cent to 20 per­cent range, down from cur­rent statu­tory lev­els of 35 per­cent — a pledge that will re­quire co­op­er­a­tion from the Repub­li­can-led US Congress.

But he said busi­ness lead­ers have told him that re­duc­ing reg­u­la­tions is even more im­por­tant.

“We think we can cut reg­u­la­tions by 75 per­cent. Maybe more,” Trump told busi­ness lead­ers.

“When you want to ex­pand your plant, or when Mark wants to come in and build a big mas­sive plant, or when Dell wants to come in and do some­thing mon­strous and spe­cial — you’re go­ing to have your ap­provals re­ally fast,” Trump said, re­fer­ring to Mark Fields, CEO of Ford.

Fields said he was en­cour­aged by the tone of the meet­ing.

“I know I come out with a lot of con­fi­dence that the pres­i­dent is very, very se­ri­ous on mak­ing sure that the United States econ­omy is go­ing to be strong and have poli­cies - tax, reg­u­la­tory or trade - to drive that,” he said.

Trump told the ex­ec­u­tives that com­pa­nies were wel­come to ne­go­ti­ate with gover­nors to move pro­duc­tion be­tween states.

— Reuters

US Pres­i­dent Don­ald Trump shows off an ex­ec­u­tive or­der to with­draw the US from the 12-na­tion Trans-pa­cific Part­ner­ship trade pact on Mon­day.

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