President Indicates He Might Be Willing To Rejoin The Pact If Doing So Sufficiently Irritates China
We’ve been arguing for more than a year that whatever group of bureaucrats came up with the name “Trans Pacific Partnership” ought to be publicly flogged. Because it’s a terrible description of what the agreement–championed by President Obama, and also many, many Republicans; killed by Trump on his fourth day in office–was all about. Which was limiting China’s growing economic influence over emerging economies in Asia. In other words, f*cking over China.
Nothing we’ve written about in the past year has elicited more viscous attacks than when we’ve supported TPP. Both from the Right and Left. The #1 reason given by far that it gives “even more power to China to take away American jobs”. Which again leads us to believe because of the milquetoast kumbaya name, people had no clue about was in it. Since not including China was the whole point of the TPP.
Anyway, the Washington Post now reports that President Trump has ordered his chief trade negotiator Robert Lightizer, and Chief Economic Adviser Larry Kudlow, to explore rejoining the group, which has continued to exist in a limited form despite the absence of the U.S.
The President’s latest proclamation coming during a meeting with Governors and Members of Congress from states with a lot of farmers. Of course, Trump’s famous for throwing around all kinds of unexpected notions only to renege later on, so there’s no guarantee anything in this vein will ever happen. (And this event was clearly meant to be a “love fest” to combat criticism that Trump’s screwing over farmers who by-and-large supported him big-time).
Still, in our opinion, it’s a great idea: far more potentially effective and less dangerous than a major trade war with China.
We have some knowledge of that area of the world. And one thing we know for sure is that people from emerging economies in Asia would much rather work with the U.S. than China. American companies have a reputation for being much more transparent and plain-dealing, while China has a long history of stripping away natural resources and returning very little. That has changed a lot recently, as China has started not just to take, but also to invest. That’s part of a plan China’s President Xi is accelerating as he tries to exploit the opportunity created by the U.S. pulling out of TPP. Still, Asian nations have been signing on to Xi’s new Silk Road project not because they are inspired by it, but without the U.S. in TPP, it’s kind of the only game in town.
The man Trump is tasking with this project, U.S. Trade Representative Robert Lighthizer, definitely has his plate full. At the start of the meeting, an usually cheery and cordial Trump said “he works 23 hours a day, and he sleeps for one”: with NAFTA, Korea trade deal, China tariffs, etc., but he has proven a competent and tough negotiator.
And TPP has never really gone away: in February, 25 Republican Senators (that’s almost half!) sent Trump a letter urging him to reconsider. And if this is something Trump’s newest economic advisers, Peter Navarro and Larry Kudlow have been getting in the President’s ear about, and gotten him to even think about changing his mind when Republican leadership in Congress couldn’t, God bless ’em.
During the same meeting, another big revelation that went almost completely unnoticed: Trump emphasized his not “pushing” for a deal on NAFTA (or killing it), saying while he’d rather kill it, he’s realized that as long as NAFTA is under negotiation, no American company is going to commit to building a big new factory in Mexico so “we can negotiate forever….I don’t care”. Honestly: good point, good strategy.
Here’s a clip of that (click on photo to play):