28th June 2018
New foreign clothing and textiles investment collapses in Vietnam
The Trump administration’s stances on the TPP in April probably established an all-time record for policy U-turns. The TPP’s major members, though, made real progress with the EU
Incomprehensibly, Western media took Larry Kudrow, Director of America’s National Economic Council, seriously on April 12 when he told Fox (a TV station) that the US will take a “fresh look” at TPP to see if can benefit the U.S. economy.
The idea was potty: Former New Zealand diplomat and trade negotiator Charles Finny said “There is no guarantee that Trump will be able to ratify any agreement. Obama failed to achieve ratification of TPP.” Trump himself showed limited enthusiasm that night, when he tweeted “Would only join TPP if the deal were substantially better than the deal offered to Pres Obama”.
Nonetheless, the Japanese Prime Minister, Shinzo Abe, dutifully went to the US, ostensibly to discuss the possibility. Predictably, Trump decided to tweet his humiliation of a loyal ally “While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States,” he announced on April 19.
In September 2016, I addressed a US clothing industry conference in New York that was convinced they’d have TPP within months. Grown-up trade diplomats told me no-one listened to voters, and trade lobbyists seemed almost unaware of the US public antipathy to the deal. Barack Obama seemed to believe the ludicrous benefits the TPP lobby was claiming, and even after Trump was elected, some asserted with straight faces that he’d U-turn on his (and Clinton’s) programme to kill the deal.
In January 2017, the US did kill the deal – the U-turn Trump promised. On April 12 2018 we got U-turn 2. And on April 19 U-turn 3. Nineteen months: four different policies. My spaniels are aghast.
Bloomberg reported on April 13 that Mexico would announce agreement on an upgrade to its 15 year old Free Trade Agreement with the EU by the end of April.
Almost simultaneously, EU Trade Commissioner Cecilia Malmstrom announced that the European Commission planned to endorse the final draft of its economic partnership agreement with Japan on April 18. And, though the EU’s proposed deal with Canada is struggling its way through the bureaucratic mire, there is no sign of any real doubt in Brussels or Ottawa that Europe and Canada want to make trade easier: just the usual forest of messy complications we pay diplomats to hack their way through for us. Might be easier if both parties listened to their voters of course .
More than ever, we cling to the view we took a few weeks ago. The TPP-11, the EU and the UK (were it to break away from the EU, which it won’t anyway) are in the process of agreeing a series of interlocking agreements which amount to a virtual parallel TPP and will eventually include Korea.
Of other potential members, neither China nor India have any interest in what the West would call an FTA with anyone. Nor does the US as long as Trump remains President. Even if he found an alternative career, the US electorate is against any real FTAs, because no-one has demonstrated their value. And no-one has demonstrated their value because no-one in the US has tried to create a new FTA any sensible voter could support.
Trade diplomacy professionals, of course, love trade deals: apart from their possible economic value, negotiating them provides a wonderful lifestyle for the unemployable and lots of ambassadorships to reward party donors. So op-ed pages in broadsheets remain awash with calls for more.
Can the US can find a formula for a politically acceptable deal with the current TPP-11 and with the current EU-28?
No. Can’t we all forget about this and get on with something else?
Well, there might be a partial “something else”: America’s relationship with Japan. They can’t live without each other – however often Trump dumps on Abe. The sensible deal they’d sign with each other would look very like what a sensible EU would sign with Canada. Can’t the Americans and Japanese sort of pilot an arrangement the EU could accept as the template for a later EU-US treaty?
Once the lunatics had been kicked upstairs. Freddy & Oscar think that’d be great