February 15, 2018 | Divya Prabhakar
Foreign trade has been one of the most hotly debated issues of President Trump’s foreign policy during his first year in office. In keeping with his campaign pledge, President Trump pulled out of the 12-nation Trans-Pacific Partnership (TPP), an agreement which he labelled a strategic blunder on the part of the previous administration. Touting his “America First Strategy,” he has set out on a mission to completely transform the United States trade landscape. Calling for a redefinition of the terms of partnership with existing trade partners and for the enrichment of industries at home, he has also called for a renegotiation of the very “disastrous” North American Free Trade Agreement (NAFTA).
Is America first America alone? While the administration denies this, the former U.S. Trade Representative, Michael Froman, believes that the answer depends purely on how other countries respond to the new U.S. trade policy. “If they don’t follow us, then most certainly, America would be alone,” says Froman.
Froman, the leading champion of the TPP under the Obama administration, said on a recent visit to the Fletcher School of Law and Diplomacy that withdrawing was a strategic blunder that would hurt U.S. economic interests in the near future. Moreover, it would create a leadership void in the Asia-Pacific region. He seemed doubtful of China’s ability to step into U.S. shoes given that its own trade policies are anything but fair. At the same time, he commended China’s One-Belt-One-Road Initiative and its plans to dominate global trade by 2050. The United States recently slapped tariffs on imported solar panels and washing machines and more may be down the road on aluminium and steel. This, Froman said, would severely impact U.S. relations with China, perhaps encouraging China to liberalize its system.
While Japan stepped forward to revive the TPP without the United States (the amended agreement is due to be signed on March 8 in Chile[1]) and the European Union is in a strong position given its recent chain of trade deals, it is unclear who will take point on global trade as the United States pulls out, said Froman. He also mentioned that the G-20, lacking effective leadership as the United States slowly walks away, may be a potential concern in the future.
Overall, Froman was optimistic, stating that “the world fears U.S. withdrawal more than U.S. leadership.” He concluded by presenting an interesting and contrarian view of the President’s bold moves on the trade front: President Trump’s supporters believe in him and understand his perspectives and policies. His efforts to revamp the U.S. trade infrastructure, from TPP withdrawal to NAFTA renegotiations, could make for a good negotiating opportunity. In Froman’s view, the future of U.S. Trade Policy is bright.
Divya Prabhakar is a first-year Master of Arts in Law and Diplomacy candidate at the Fletcher School where she focuses on international trade, investments, and political economy.
[1] Kyodo, The Japan Times, “TPP Member Nations aim to sign trade pact without U.S. on March 8”, January 23, 2018, https://www.japantimes.co.jp/news/2018/01/23/business/tpp-member-nations-aim-sign-trade-pact-without-u-s-march-8/#.WoOBkahubIU
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