The U.S. Wants Back in the TPP? Good Luck With That.
Asia is moving on without America when it comes to trade — and could be better off for it.
More than a year after withdrawing from a big Asia-Pacific trade pact, the Trump administration keeps talking about rejoining it on its own terms. But the Asia-Pacific countries that were eager a year ago to hold the door open for the United States are now busy building their own trading order — without Washington at all.
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Earlier this month, speaking in Chile, Mnuchin said Washington would “definitely” be open to rejoining the pact — once all the administration’s other trade deals were taken care of, and provided the trade accord could be rewritten to be more beneficial to the United States. (U.S. trade officials declined to say what those revised conditions might be.)
And Larry Kudlow, a former television commentator who was named Trump’s top economic adviser, said this month that the United States could lead a “trade coalition of the willing” to counter China’s trade heft and abuses — almost the very definition of the TPP that Trump walked away from early in his presidency.
But that ship seems to have sailed. The remaining 11 countries from the original TPP signed a slightly slimmed-down version of the accord earlier this month in Chile, suspending a score of controversial provisions that the United States had insisted upon. Member countries are already in the process of ratifying the deal, which could go into effect early next year.
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“Is there a chance in hell anyone wants to reopen the thing to get the U.S. back in? Not under a Trump administration,” says Mike Callaghan, a former Australian Treasury official and economic advisor to the prime minister, now at the Lowy Institute, a Sydney-based think tank.
That’s partly because many countries in the Asia-Pacific region are already inking new, ambitious trade deals left and right even as the Trump administration struggles to tweak existing pacts such as the North American Free Trade Agreement and the free trade deal with South Korea.
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The revised TPP — now formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — is smaller and leaner than the original accord. Without the United States, it covers only between 13 and 18 percent of the global economy, rather than 40 percent. That will mean smaller trade benefits for everybody.
But the new TPP is also an easier pill for many Asia-Pacific nations to swallow, which should make ratification and longer-term support easier to secure. Gone for now are 22 provisions that U.S. negotiators had insisted on but that were unpopular with potential partners. Those included protections for pharmaceuticals, longer patents and extended copyrights, and some extra protections for corporations against national governments.
“Almost by definition, the suspended parts cover topics that were controversial to the TPP-11 members, otherwise they would not have been suspended,” Callaghan says.
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For other countries, like Australia, joining the TPP alongside the United States in the first place, or coaxing Washington back in, is not ultimately about trade; Canberra already has a free trade pact with the United States. Rather, Callaghan says, it’s about making sure the United States stays engaged in the Asia-Pacific region as China flexes its economic and military might.
“For Australia, the driving force behind the TPP was not so much access to the U.S. market as locking the U.S. into the Asian region,” he says.
For Cutler, who saw previous Congresses and presidents change their minds on trade pacts they once vilified, the mere fact that Trump administration officials keep talking about rejoining the TPP is encouraging. U.S. presence in the pact would advance many of the administration’s professed goals, she says, from prying open Asian markets to pushing back against China’s heft. And ratifying a big trade deal would only require one bruising battle with Congress, while a series of bilateral trade deals will mean going back to the Hill again and again.
“It’s important that the United States makes positive signals, compared with a year ago,” Cutler says. “Over time, they might come to understand the value” in the trade pact.
