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President-Elect Trump Pledges to Withdraw from TPP

In a video message released on 21 November, president-elect Donald Trump pledged to issue a notification of intent to withdraw the United States from the Trans-Pacific Partnership, which he described as a “potential disaster for our country.” Instead, Trump said the United States would negotiate “fair, bi-lateral trade deals that bring jobs and industry back onto American shores.” This is one of several executive actions the president-elect vowed to take on his first day in office. Other immediate measures include a rule that would ostensibly eliminate two old regulations for every new regulation issued as well as more stringent restrictions on lobbying carried out by former executive officials.

The current White House expressed disappointment at Mr. Trump’s words but Republicans in Congress still believe they can work with the president-elect to advance U.S. trade priorities. House Ways and Means Committee Chairman Kevin Brady (Republican-Texas) indicated on 22 November that his advice to the new administration would be to strictly enforce trade agreements but not withdraw from TPP or NAFTA because the U.S. needs “more customers around the world” and the Asia-Pacific region “will hold half of the middle-class customers on the planet by the end of the decade.” Senate Finance Committee Chairman Orrin Hatch (Republican-Utah) also supports a strong TPP that meets the standards of Trade Promotion Authority, although he recently raised the possibility of pursuing a bi-lateral deal with Japan if there is no path forward for TPP.

While president-elect Trump’s views on the TPP and other trade deals such as the North American Free Trade Agreement may appear extreme, it is an area where Congress could potentially steer him towards a more pragmatic approach. Otherwise, the United States would run the risk of ceding the global initiative on trade to mainland China, especially if the on-going Transatlantic Trade and Investment Partnership negotiations with the European Union are also put indefinitely on hold. President-elect Trump may conceivably imitate President Obama’s approach to trade, where he worked to make some modifications to the trade deals he inherited and eventually pushed in favour of these deals three years into office.

Content provided by Picture: HKTDC Research
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