WASHINGTON — On the one-year anniversary of President Donald Trump’s formal withdrawal from the Trans-Pacific Partnership (TPP), the eleven other nations from the formerly 12-member group announced this week they had reached a deal for the formation of a new 11-nation trade group.
The deal, which is known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), came on the first day of the three–day World Economic Forum in Davos, Switzerland. It is expected to be formally signed in March in Chile. For it to fully take effect, it must be ratified by a majority of participants.
Just days after the new trade deal was announced, President Donald Trump has indicated he may be open to joining the new multilateral deal, or something similar to it.
“I would do TPP if we were able to make a substantially better deal,” he said in an interview with CNBC Thursday in Davos. “The deal was terrible, the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP.”
Earlier this week, ambassadors from Trans-Pacific Partnership member countries, European Union and African countries criticized the United States for pulling out of the TPP, but they have not given up on dissuading the Trump administration from pulling out of other multinational trade agreements.
Ambassadors from Singapore, Chile and European Union, gathered at the Washington International Trade Association, stressed that the United States remained their most important trading partner despite the rising influence of China.
“We continue to believe that it is essential for the U.S. to be part of this agreement,” said Chilean Ambassador to the United States Juan Valdes. “We believe that at some point this would happen.”
Valdes said that the U.S. should view TPP as far more than a trade agreement, because of its important geopolitical implications.
“Chile was perfectly aware of the geopolitical side of this agreement, and of the need of introducing the standards that would be demanding for the partners in the Asia-Pacific area.” said Valdes.
Trump has been outspoken in his opposition to multilateral trade deals. In addition to withdrawing from TPP, Trump has threatened to pull out of the North American Free Trade Agreement (NAFTA), and has been critical of the World Trade Organization, saying it has treated the U.S. unfairly. And just this past week, the Trump administration imposed tariffs on the imports of washing machines and solar panels.
Instead, it appears that Trump favors bilateral deals, promoting the value of working one-on-one with other countries and working out mutually beneficial deals.
“I like bilateral because if you have a problem, you terminate,” he said in his CNBC interview. “When you’re in with many countries – like with TPP – you have 12 if we’re in, you don’t have that same option.”
Appearing with British Prime Minister Theresa May at the forum in Davos Thursday, Trump was promoting bilateral efforts with America’s oldest ally.
“The discussions… that will be taking place are going to lead to tremendous increases in trade between our two countries which is great for both in terms of jobs,” he said. “We look forward to that and we are starting that process, pretty much as we speak.”
But Australian Prime Minister Malcolm Turnbull believes that it was possible the U.S. could come onboard to the newly-formed Asia-Pacific trade deal.
“The way the agreement is structured is so America can dock back in,” he said Wednesday at a news conference announcing the new trade treaty.
And when the issue of the U.S. moving away from a leadership role in global trade came up at the forum, U.S. Commerce Secretary Wilbur Ross pushed back during a panel session.
“We don’t intend to abrogate leadership, but leadership is different from being a sucker and being a patsy,” he said. “We would like to be the leader in making the world trade system more fair and more equitable to all of the participants. It’s not a lack of leadership, it’s not a lack of willingness to lead – the fact that we have some issues with the present system is different from the idea of whether we’re prepared to take leadership.”
Trump is scheduled to give remarks on Friday at the forum, where he could give more of a window into his thinking on this topic.