President Donald Trump will sign an executive order on Monday to withdraw the US from the Trans-Pacific Partnership trade deal, according to an official familiar with the plans.
Trump’s trade-focused executive order, part of a series of actions planned for Monday, fulfill a campaign promise to rewrite America’s trade policy during his first days as president.
The TPP, a 12-country deal that sought to liberalise trade between the US and Pacific Rim nations including Japan, Mexico and Singapore, was a signature piece of former President Barack Obama’s 'pivot' to Asia. Trump campaigned against the pact and other trade deals, such as the North American Free Trade Agreement, during his campaign for the White House.
In a video released in November, Trump promised to exit the deal “on day one.” He called the trade pact “a potential disaster for our country.”
Despite Congress’s approval of 'fast track' authorisation for the agreement in 2015, it was never formally authorised by the US. Lawmakers from both sides of the aisle said they grew increasingly concerned it would result in a loss of American jobs.
The future of the TPP is now in flux. Japanese Prime Minister Shinzo Abe said in November that TPP without the US would be “ meaningless.” Still, multiple signatory countries including Vietnam and Australia have said they would stick to the deal even without the leading party of the agreement.
‘Death Blow’
Trump made trade one of the central issues of his campaign, which found success in the former industrial areas of states such as Wisconsin and Michigan. Both states were often considered strongly Democratic before they flipped to Trump in 2016.
In a June speech in Pittsburgh, Trump attacked the deal, which he said “would be the death blow” for American factories. “It would give up all of our economic leverage to an international commission that would put the interests of foreign countries above our own,” he said.
While some had pushed for the Congress to vote on the agreement in a lame-duck session after the election, the vote never materialised.
In the final days of the Obama administration, six US ambassadors in Asia attempted to push for a last-minute vote on the pact, which they said if abandoned would cede international leadership to China, which isn’t a part of the TPP. “Such an outcome would be cause for celebration among those who favor ‘Asia for the Asians’ and state capitalism,” the ambassadors wrote in a letter.
Rather than support wide-ranging regional trade agreements, Trump has proposed negotiating bilateral trade agreements. He has also proposed enacting tariffs on imports to protect domestic manufacturing.
In addition to withdrawal from TPP, Trump is widely expected to notify the leaders of Canada and Mexico of his intent to renegotiate Nafta, the 1994 trade deal between the North American countries.
News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.
