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trade

Trump Reconsiders TPP. But Will They Reconsider Him?

Virtually moments into his presidency, Donald Trump backed the United States out of the 12 nation trade deal, the Trans Pacific Partnership, or TPP, that had taken years to negotiate. For him it was a twofer: he could please his base, which thinks any trade deal threatens their jobs, and he could reject a major initiative of Barack Obama as part of his campaign to overturn everything accomplished by America's first black president.

But now he wants to reconsider.

That has been a recurring pattern with this president. Mr. Trump entered office with firmly held opinions but only superficial knowledge of the subjects with which he would have to deal, yet he has repeatedly made impetuous decisions only to learn afterward that they were ill-informed and needed walking back. Defense Secretary James Mattis observes that a Trump decision can be like the weather: if you don't like it, just wait, it may change.

Trump just did it once again when he told a crowd in Richfield, Ohio, that "We're coming out of Syria, like, very soon". Taken by surprise, his advisers scrambled to come up with how that meant we would not fully withdraw, of course, because that would create a vacuum allowing for the resurgence of ISIS and al Qaeda.

tariffs

Thinking he could take action without any reaction, he suddenly, and without consulting with advisers about likely ramifications, announced tariffs on two entire commodities, steel and aluminum. Only after his proclamation did he learn that he missed his principal target — China — and is hurting the wrong trading partners, Canada most prominently. He has since had to waive the tariffs for one after another country. China retaliated. They took aim directly at Trump's voter base, cutting back imports of soybeans and pork. Farmers from Kansas through the Dakotas are distraught. " If he doesn’t understand what he’s doing to the nation by doing what he’s doing, he’s going to be a one-term president, plain and simple”, said one North Dakota farmer.

climate

Last June, Trump announced that the U.S. was withdrawing from the Paris climate accords, calling it as usual a bad deal, making this country a pariah among all the nations on Earth — 195 countries had signed on — and not by accident undermining the global initiative in which Barack Obama was heavily invested. Hoping to head him off, 630 business leaders had signed an open letter to Trump; 25 companies including Apple, Facebook, Google and Microsoft had bought full-page ads in the major newspapers urging the U.S. to remain because the agreement will "generate jobs and economic growth" and "U.S. companies are well positioned to lead in these markets".

That seemed to sink in only after the damage was done. Wanting a voice after all, Trump began to retrench, authorizing (we assume) the U.S. delegation that showed up at the U.N. climate talks in Germany last November, where a State Department undersecretary had this to say:

“Although he has indicated that the United States intends to withdraw at the earliest opportunity, we remain open to the possibility of rejoining at a later date under terms more favorable to the American people.”

Every deal made by others is a bad deal for Donald Trump. In business, his deals would have been with a couple of people across the table. Is that what makes him blind to the absurdity of stipulating new terms to 195 countries as if across the table there will be only a single person with "195 nations" penned on a conference name tag?

iran

It is the same with the Iran agreement. Trump has repeatedly called “one of the worst negotiated deals of any kind that I have ever seen”. The accord never contemplated going any further than being an arms control agreement limited to nuclear weapons. When Donald Trump called the deal “an embarrassment” in July, he had evidently lost sight of that limitation. Forgotten is how difficult it was to arrive at even that. The talks took a grudging 20 months, punctuated by disputes and walkouts and needing repeated deadline extensions as negotiators fought over final terms and language. Trump's notions that there could have been a better deal are groundless; the Iranian negotiators were obdurate. The concern on our side of the table was that they would quit the talks.

In May, Trump is required once again to decide whether Iran is in compliance. With Tillerson and McMaster gone, who with difficulty managed the last time to get the president to hold off, Trump is expected this time to drop out of the Iran accord, paying no heed to our negotiating partners — Britain, China, France, Germany and Russia. That will do away with the one restraint already in place, doubling the Iranian problem by creating a second intractable nuclear aspirant to deal with.

pacific overtures

Which brings us back to the Trans-Pacific Partnership. Having walked away from the deal literally on his first day in office, President Trump has woke up to what a blunder that was. With Trump quitting the field, into the void has stepped China, deliberately not one of the countries bordering the Pacific that are in the pact. The TPP was promoted by President Obama as a bulwark against China; without it he warned that we risk allowing China to set the rules.

There was at least a possibility to propose renegotiation at that point — to get rid of its more imperialistic ambitions. But Trump blew it by simply viewing it as his first on the revenge list against Obama. (He literally nixed the TPP on his first day in the White House). These pages four years ago railed against the TPP, not against Obama’s hopes to create a trading bulwark to ward off Chinese dominance in the region, but for the secrecy, for Obama's wanting to push the agreement through Congress on a "fast-track", no changes, no amendments, up-or-down vote.

In mid-April Trump directed advisers Larry Kudlow and Robert Lighthizer to see whether we could regain membership in the pact — after getting a better deal, of course. This time Trump is on to something, but likely doesn't know what. Once again, he appears to think the U.S. can dictate revisions to an agreement that literally took years of negotiation (it was set in motion by Bush Jr. in 2008).

Here is what the president should focus on:

 600 representatives of corporations were privy to the agreement's contents for review. Some of the provisions were written by them, it was reported. To enforce provisions of the treaty, corporations would be able to sue governments directly, sidestepping a nation’s court system and its laws by bringing cases before special World Bank and United Nations tribunals, with the host nation bound by the compact to compensate the corporation in the event of adverse rulings.

 Companies can challenge a country when its laws conflict with the trade agreement. Under what are called “investor state” rights, they can even claim compensation for the alleged loss of “expected future profit”. Multinational companies will finally have found the grail: power greater than that of the sovereign states in which they do business.

 Foreign companies could sue for exemption from a country's laws. They could complain that a nation’s food inspection laws exceed those of their home country, for example. Or that product safety regulations go beyond the trade pact and that import of their goods should not be blocked. One need only think of the range of problems the U.S. has had with Chinese imports — toys with lead paint, toothpaste with diethylene glycol, wallboard that has made people ill.

 Low wage foreign companies would be free to undermine our minimum wage laws. They would be exempt from any environmental regulations that exceed whatever is universally agreed to by the member countries — which is sure to set a very low bar. A foreign mining company could probably blow past regulations that ban our companies from mining in an area with risks to the water supply.

 All government contracts would be open for bidding by foreign companies. Job creation policies that require a contractor to use American labor and manufactures would be outlawed. We would see the American tax dollars that pay for such contracts go to foreign corporations.

The U.S. participation in the Trans-Pacific Partnership was viewed as key by the other members, but they've gone on without us, signing the deal in Chile this March. Learning of Trump's about face, but only if the U.S. is given a "substantially better" deal, says that Trump has no idea what is meant by a carefully wrought deal across 11 countries. His notion of special accommodations for the U.S. has so far met with a representative of one of the countries as "ridiculous".

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