U.S. President Donald Trump said the United States would only join the Trans Pacific Partnership, a multinational trade deal his administration walked away from last year, if it offered “substantially better” terms than those provided under previous negotiations.
His comments, made on Twitter late Thursday, came only hours after he had unexpectedly indicated the United States might rejoin the landmark pact, and amid heightened volatility in financial markets as Washington locked horns with China in a bitter trade dispute.
According to CBC News, it is the second of a pair of dramatic moves, with the Trump administration signalling a growing desire to secure new trade deals — softening one key demand in the NAFTA negotiations, then expressing an interest in re-joining the Trans-Pacific Partnership.
The twin developments are a departure from the combative posture that had stoked U.S. tensions with Canada, Mexico, the European Union, Japan and even with the United States’ own struggling farmers, straining under threats of cancelled deals, tariffs, and tit-for-tat trade wars.
The development most immediately affecting Canada transpired at the NAFTA negotiating table where, sources have told CBC News, the U.S. has shaved 10 percentage points off its demand on automobile content. After spending months demanding a big increase in the amount of content cars must include from North America to avoid a tariff, in addition to insisting that half of every car comprise U.S. parts, it has now softened both proposals.
According to Reuters, Trump had told Republican senators earlier in the day that he had asked United States Trade Representative Robert Lighthizer and White House economic adviser Larry Kudlow to re-open negotiations.
In his Twitter post, which came during Asian trading hours, Trump said the United States would “only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!”
Policymakers in the Asia-Pacific region on Friday responded to the possibility of the U.S. rejoining the trade deal with scepticism.
“If it’s true, I would welcome it,” Japanese Finance Minister Taro Aso told reporters after a cabinet meeting on Friday and before Trump’s tweet. Aso added that the facts needed to be verified.
Trump “is a person who could change temperamentally, so he may say something different the next day,” Aso told Reuters.
Australian Prime Minister Malcolm Turnbull, commenting after Trump’s tweet, said it would be “great” to have the U.S. back in the pact though doubted it would happen.
“We’re certainly not counting on it,” Turnbull told reporters in Adelaide in South Australia.
The TPP, which now comprises 11 nations, was designed to cut trade barriers in some of the fastest-growing economies of the Asia-Pacific region and to counter China’s rising economic and diplomatic clout.
Trump, who opposed multilateral trade pacts in his election campaign in 2016 and criticized the TPP as a “horrible deal”, pulled the U.S. out of the pact in early 2017. He argued bilateral deals offered better terms for U.S. businesses and workers, and signaled an intention to raise trade barriers, according to Reuters.
But Trump is struggling to get support from other countries for his recent threat to impose import tariffs on China and the U.S. farm lobby is arguing that retaliation by China would hit American agricultural exports.
Trade experts believe Trump is probably trying to placate his political base in the wake of criticism over the U.S.-China China tariff standoff.