“Either we build (finish) the Wall or we close the Border……”

This should really sort out trade and migration issues.

One could wonder whether international trade agreements mean anything with Trump as President (it doesn’t sound like he is in charge).

New Zealand may have dodged a bullet with Trump pulling the US out of the Trans-Pacific Partnership – I doubt that Trump has any idea about the concept of ‘partnership. or ‘agreement’.

 

Trump threatens countries who don’t negotiate ‘fair trade’ deals with tariffs

The United States negotiated a wide ranging trade deal with eleven Pacific rim countries in the Trans-Pacific Partnership Agreement.

Donald Trump withdrew the US as son as he became president. The eleven remaining countries went on to ratify the agreement without the US. Since then Trump has reconsidered – Trump Proposes Rejoining Trans-Pacific Partnership – but hasn’t done anything more than pontificate.

Trump has also attacked other trade agreements and trading arrangements, including with:

With all this chaos going on Trump has just issued another  threat:

Trump may succeed in bullying some countries into better deals for the US, but this ultimatum approach is not good for getting mutually beneficial and long lasting trade agreements.

And it is not good for international relations generally.

Playing the tough guy (except with Russia) may keep pleasing Trump’s dedicated base supporters,

And this is also having an impact on the US, with farm subsidies, already a major factor in trade issues, set to increase.

WSJ: Trump Administration to Offer About $12 Billion in Farm Aid to Ease Concerns Over Trade Disputes

The Trump administration on Tuesday is expected announce a plan to extend some $12 billion in emergency aid to farmers amid growing concerns that the U.S. agricultural sector could suffer from President Donald Trump’s escalating trade dispute with allies…

US agriculture has long been bolstered by subsidies and tariff protection – and still needs more aid to survive. Nuts.

WSJ: The Many Ways Trump’s Trade Disputes Are Affecting the Auto Industry

Auto-industry representatives are expected to argue during a U.S. Commerce Department hearing Thursday that President Donald Trump’s proposed tariffs on auto imports would cost jobs and increase car prices.

The White House in May asked the Commerce Department to investigate whether it could use a national-security law to impose tariffs of up to 25% on imported vehicles and car parts. Mr. Trump has argued trade barriers are needed to pressure manufacturers to build more goods in the U.S. and expand factory jobs.

WSJ editorial: Trump Rides a Harley—to Europe

Donald Trump’s trade war has been an abstraction for most Americans so far, but the retaliation has now begun in earnest and the casualties are starting to mount. The President’s beloved stock market took another header Monday on news of more restrictions on investment into the U.S., and the Dow Jones Industrial Average is now down for 2018.

The rest of the world can’t avoid being affected by Trump’s trade interventions and tariffs, but at least they can trade amongst each other. In the meantime Trump is isolating the US, and burning a lot of diplomatic and good faith bridges.

Trump’s trade chaos could get very messy, and not just with trade wars.

GOP senators versus Trump’s TPP and trade tirades

Yesterday in New Zealand the text of the Trans-Pacific Partnership (CPTPP) was released. Next month it is likely to be signed by the eleven countries who renegotiated some parts of the agreement after Donald Trump pulled the United States out soon after becoming president.

Trump had strongly criticised the TPP during the presidential campaign. It’s hard to know whether he thought it was a ‘bad bad deal’ or it was an attempt to sound tough on trade in order to get more favourable deals.

If it was a bluff it failed, because the TPP is proceeding without the US.

Last month (26 January 2018) Trump appeared to soften his stance on the TPP in an interview with CNBC while at DAVOS: Read President Trump’s full remarks on trade deals to CNBC

  • In an interview with CNBC, he says he could rethink the Trans-Pacific Partnership if the U.S. can secure a better deal.

Trump’s remarks on the TPP:

Trump: I like bilateral, because if you have a problem, you terminate. When you’re in with many countries — like with TPP, so you have 12 if we were in — you don’t have that same, you know you don’t have that same option. But somebody asked me the other day, ‘Would I do TPP?’ Here’s my answer — I will give you a big story. I would do TPP if we made a much better deal than we had. We had a horrible deal. The deal was a horrible deal. NAFTA’s a horrible deal, we’re renegotiating it. I may terminate NAFTA, I may not — we’ll see what happens. But NAFTA was a — and I went around and I tell stadiums full of people, I’ll terminate or renegotiate.

(NAFTA is an agreement between the US and two TPP countries, Canada and Mexico. Trump insisted on it being renegotiated, but that appears to be bogged down. See below.)

Kernen: So you might re-enter, or? Are you opening up the door to re-opening TPP, or?

Trump: I’m only saying this. I would do TPP if we were able to make a substantially better deal. The deal was terrible, the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP.

Kernen: That’s interesting. Would you handicap … ?

Trump: Are you surprised to hear me say that?

Kernen: I am a little bit, yeah, I’m a little taken aback.

Trump: Don’t be surprised, no, but we have to make a better deal. The deal was a bad deal, like the Iran deal is a bad deal, these are bad deals.

Yesterday the Washington Post reports: 25 GOP senators urge Trump to restart TPP trade talks, a deal he called a ‘disaster’

Twenty-five Republican senators, including Senate Majority Whip John Cornyn (R-Tex.), sent President Trump a letter Friday asking him to “re-engage with the Trans-Pacific Partnership.” It’s the latest attempt by Republican lawmakers to get Trump to take a softer stance on trade, even though his administration is gearing up to erect more trade barriers. Trump withdrew from the TPP in his first week in office after calling the trade deal a “disaster” and a “rape of our country” during his presidential campaign.

“We encourage you to work aggressively to secure reforms that would allow the United States to join the agreement,” the senators wrote. “Increased economic engagement with the 11 nations currently in TPP has the potential to substantially improve the competitiveness of U.S. businesses, support millions of U.S. jobs, increase U.S. exports, increase wages, fully unleash America’s energy potential, and benefit consumers.”

There is a sharp divide between congressional Republicans and the Trump administration on how to handle trade. Trump blasted America’s trade deals during his campaign and vowed he would either renegotiate many deals or scrap them, but many senators believe harsh action on trade would backfire, causing the loss of U.S. jobs and businesses.

Ripping up the TPP was a key talking point of Trump’s campaign. He portrayed it as a deal that President Barack Obama and Democratic candidate Hillary Clinton concocted. It would lower tariffs — better known as taxes — on goods traded between the United States and 11 other countries in the Pacific Rim (Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Malaysia, Singapore, Vietnam and Brunei).

Supporters of free trade, including many Republicans, worried that Trump had made a mistake. They feared the United States was giving up its leadership role and ceding even more power to China. China was excluded from the TPP in an attempt to counter the communist country’s growing influence on the global economy.

After the United States pulled out of TPP in January 2017, Canada took over the leadership role.

Actually Japan probably took over more of a leadership role, and Canada caused a few hiccups in Vietnam last November, but eventually agreed on the CPTPP.

Many of the GOP senators who signed the letter are from states with a lot of agriculture, including Joni Ernst of Iowa, John Barrasso of Wyoming and Ben Sasse of Nebraska.

“Farm states were a lot of the big losers from the United States not going ahead with TPP,” said Chad Brown, a senior fellow at the Peterson Institute for International Economics. “TPP would have lowered agriculture tariffs in a couple of countries where they had been high.”

Perhaps the best example is that Japan was willing to lower its tariffs on U.S. beef, opening a potentially lucrative market for American farmers. But now that the TPP is moving forward without the United States, Australian and New Zealand farmers probably will be the biggest beneficiaries.

Yesterday the Canadian Globe and Mail reported in Where do NAFTA talks go from here?:

“We got a blunt and sobering message last week from Steve Verheul, Canada’s head NAFTA negotiator, telling us that negotiations with the Americans are bogged down and, apart from some agreement on peripheral things, there’s absolutely no movement on the really tough issues.

The fundamental problem, Mr. Verheul said, is that the United States isn’t approaching the negotiations with the objective of concluding a balanced deal. The Trump administration’s position is “America First” and “America Only,” reflecting the tone of the President’s bellicose inaugural address.

As a result, the United States has tabled one-sided, intransigent positions, non-starters for Canada from day one. U.S. negotiators have no room to compromise because of orders from the White House. It’s clear that there’s a long, slow and painful road ahead in trying to achieve a North American free-trade deal, with agreement pretty remote at this stage.”

The US also faces trade problems in Europe. Forbes – EU Tells Trump: No Paris Climate Deal, No Free Trade

When Donald Trump took office last year, the assumption was that the transatlantic trade and investment partnership was dead.

The controversial free trade deal between the EU and the U.S., known as TTIP, was already years in development and was a big focus in Europe, particularly with left-wing protesters who said the EU would necessarily have to lower its environmental, health and safety standards to American levels. When Trump was elected on an anti-free-trade platform in 2016, these activists found themselves in the uncomfortable position of being on the same side as the new U.S. president.

Work on TTIP has come to a halt, although the European Commission has been keen to stress that it is not officially dead and talks could continue if the U.S. administration were to indicate interest. No such signal from Washington has been forthcoming.

It is in this context that France’s foreign affairs minister Jean-Baptiste Lemoyne told the French Parliament last week that his country will insist that TTIP never be revived if Trump carries through on his promise to leave the Paris Agreement.

“One of our main demands is that any country who signs a trade agreement with EU should implement the Paris Agreement on the ground,” Lemoyne said. “No Paris Agreement, no trade agreement. The U.S. knows what to expect.”

The US under Trump’s leadership is at risk of isolating itself on trade as the rest of the world continues to negotiate and make trade agreements.

Trump withdraws threat to withdraw from NAFTA

Yesterday it was being reported that a White House official had indicated that Donald Trump was likely to sign an order beginning the process for the US to withdraw from the NAFTA trade agreement.

That appears to have been a bluff, or Trump has reconsidered.

Trump has more or less confirmed that, but now says he has held off doing that pending negotiations with Canada and Mexico, but Trump has left a threat to withdraw hovering over talks.

Bloomberg: Trump Says Nafta Pullout Still Possible If Renegotiation Fails

President Donald Trump said Thursday he’s still ready to pull out of the North American Free Trade Agreement if he can’t renegotiate better terms for the U.S. but that he decided to hold off on a decision after appeals from the leaders of Canada and Mexico.

“I was going to terminate NAFTA as of two or three days from now,” Trump told reporters in the Oval Office. But he said he reconsidered after Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau both phoned him Wednesday asking him to renegotiate the deal instead. Those talks will start as soon as today, he said.

Trump also said a quick U.S. withdrawal “would be a pretty big shock to the system.”

But Trump… added that “If I’m unable to make a fair deal for the United States–meaning a fair deal for our workers and our companies, I will terminate NAFTA.”

So the threat is still there. That seems to be how Trump likes to ‘negotiate’. And how he deals with ‘promises’.

Back in December:  Trump’s stance on NAFTA was a ‘campaign promise designed to be broken’

President-elect Donald Trump’s vow to renegotiate the North American Free Trade Agreement, or NAFTA, would have a detrimental impact on the United States’ automobile industry and its jobs, VLF Automotive CEO Bob Lutz told CNBC on Friday.

Once Trump looks at the impact of the goals he voiced on the campaign trail, he will find a way out of pushing the auto industry into disarray, Lutz said on CNBC’s “Power Lunch.”

“I have every confidence that this is a campaign promise that is designed to be broken,” Lutz said.

“Trump is a reasonable, good, analytical businessman. Once he takes an earnest look at pluses and minuses of dealing with NAFTA and sees what the impact on American jobs [is],” he’ll find a way to roll back any promise of dismantling the agreement, Lutz contended.

The problem with Trump’s argument that producing car parts abroad constitutes unfair trade practices is that there are international systems in place that are mutually beneficial, said Lutz, who was formerly the vice chairman of General Motors.

So those who voted for Trump based on his promises may have to get used to his wheeling and dealing and flip flopping.

The North American Free Trade Agreement came into force on 1994.

Most economic analyses indicate that NAFTA has been a small net positive for the United States, large net positive for Mexico and had an insignificant impact on Canada.

Chad P. Bown (senior fellow at the Peterson Institute for International Economics): “a renegotiated NAFTA that would reestablish trade barriers is unlikely to help workers who lost their jobs — regardless of the cause — take advantage of new employment opportunities.”

Harvard economist Marc Melitz: “recent research estimates that the repeal of NAFTA would not increase car production in the United States.” Melitz notes that this would cost manufacturing jobs.

https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement

It didn’t just happen

A misleading Martyn Bradbury headline: That thing Key promised was unlikely to happen with the TPPA just happened

Beyond the spin that NZers would have a say about the TPPA, beyond the lies of how much money it will make us, beyond the fact it’s an American geopolitical strategy to counter China in the pacific – is the terrifying reality that the TPPA opens NZ up to foreign corporations suing us if domestic law costs them money.

Key say’s it’s unlikely to happen – it just did.

Except that it didn’t just happen under the TPPA.

The thing that is happening between Canada and the US is under the North American Free Trade Agreement and has nothing to do with the Trans Pacific Partnership Agreement, which hasn’t yet been signed or ratified and hasn’t come into effect yet.

Bradbury goes on to sort of acknowledge this…

…by signing the TPPA and having it ratified by the necessary members John Key is signing away our ability to pass domestic law without costing us millions in legal fees and opening us up to potentially massive damage claims from unscrupulous corporates.

But as we know Bradbury’s frantic ranting is hard to take seriously. He is in the ‘trade deal bad’ and ‘corporation bad’ club.

I wonder how many members of the unions who support The Daily Blog (presumably financially) owe their employment to corporations?

And I wonder how many of them owe their employment to trade deals?

I suspect the jobs of some members of the Rail and Maritime Transport Union are at least partly reliant on imports and exports that happen because of trade deals.