President Donald Trump shocked Washington on Thursday when he told lawmakers he was looking into rejoining the Trans-Pacific Partnership. In his first week in office, Trump withdrew the US from the huge free trade pact after criticizing it sharply as a bad deal for American workers on the campaign trail.
But now it appears he’s changing his mind yet again — back to his original stance.
“While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States,” Trump tweeted Tuesday night. “Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers.”
The TPP is a free trade agreement between 11 Pacific Rim countries, including Canada, Mexico, Japan, and Australia, which eliminates barriers to buying and selling goods and services between them. On his path to the White House, Trump said it would end up killing jobs in the US by exposing them to more foreign competition.
It’s unclear if Trump’s tweet means he has decided against rejoining the TPP or if it’s just a general expression of skepticism as the process is underway.
Trump’s tweet came hours after his top economic adviser Larry Kudlow told reporters the US is “in the pre-preliminary stages of any discussions” with TPP countries about rejoining the pact, and that the prospect of reentry was more a “thought” than a “policy” at this point. The 11 countries that make up the TPP all signed on to the free trade agreement in March and are currently in the process of officially ratifying the deal.
On Thursday night, after the original news that he was reconsidering the agreement broke, Trump tweeted that he would “only join TPP if the deal were substantially better than the deal offered to Pres. Obama.” That seemed to suggest he had withdrawn from the TPP because he thought the terms of the agreement didn’t favor the US as much as he liked.
Now, based on his latest tweet, he seems to simply find the very idea of doing a multilateral deal — that is, an agreement with more than one other country — to be overly complicated and cumbersome.
It’s difficult to determine what’s causing the president’s equivocations and reversals. Trump revisited the idea of joining the TPP while telling farm-state lawmakers and governors on Thursday that it could open up new export markets for American farmers’ crops. He apparently did that in response to lobbying from US farmers, who were worried about China’s promise to impose tariffs on their products, as Washington and Beijing gear up for a possible trade war. But it’s hard to tell why that calculation would change within a matter of days.
Trump’s true position on the TPP is vague. But what is clear is that he’s doing huge damage to his ability to secure a stronger deal if he chooses to negotiate one in the future.
Trump has sent lots of mixed signals on the TPP lately. This puts him in a weak position.
If Trump does ultimately decide to get into formal talks over the TPP, as he instructed his economic advisers to look into last week, he’s going to be in bad shape.
Trade experts like Edward Alden at the Council on Foreign Relations say Trump already squandered his best chance to nail down a stronger deal than Obama did after he left. The other 11 countries in the agreement have already wrapped up grueling negotiations, and Trump simply doesn’t have the leverage he would have had if he were already in talks and threatening to pull out if he doesn’t get what he wants (much the way he has with renegotiations over NAFTA).
But by sending these mixed signals on the TPP, he’s further weakening his negotiation position. That’s because he’s losing something that analysts point out as key to effective bargaining in trade talks: credibility.
Countries that have signed on to the TPP are going to be more skeptical than ever that the US is truly committed to rejoining. And if they don’t trust Trump, they’re going to be more reluctant to make concessions to US demands, which could include things like forcing Japan to import more US cars or agreements on patent laws that benefit US pharmaceutical companies.
They’re also going to question if Trump has the competence and resolve to convince Congress to approve any agreement that he secures, especially after the midterm elections in November, since it’s unclear if Republicans will remain in control of the House.
In fact, Trump’s constant reversals on the TPP will also weaken his strength as a negotiator for potential future bilateral deals with Japan, the UK, or others. It would be foolish for any country to concede to his demands if they know he could change his mind about the deal, or any of its provisions, if they wait long enough.
So Trump is potentially shooting himself in the foot here by making unforced errors. The US has enormous leverage in trade talks because it has a highly desirable market. And Trump’s top trade official, US Trade Representative Robert Lighthizer, is a formidable negotiator with trade experience dating back to the Reagan era.
But all this doesn’t amount to much if Trump can’t make up his mind about what he wants.