Fall of TPP Under Trump Signals New Era for American Trade

PHOTO: President Donald Trump signs one of three executive orders including withdrawing the US from the Trans-Pacific Partnership trade deal, as Chief of Staff Reince Priebus looks on in the Oval Office of the White House in Washington, DC, Jan. 23, 2017.PlaySaul Loeb/AFP/Getty Images
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President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership on Monday, and critics of the doomed deal say the move will protect American jobs.

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The withdrawal, which threatens to distance the U.S. from some of its Asian allies, fulfilled a campaign pledge by Trump to end U.S. involvement in the 2015 pact and likely marks the beginning of a new chapter in Washington's approach to global trade — one more focused on shielding domestic industries from foreign competition.

Unlikely Allies

Trump, who hopes to boost U.S. manufacturing jobs during his term, signed the executive memorandum authorizing the withdrawal in the Oval Office. Later, as he met with union leaders in the White House's Roosevelt Room, he said, "We're going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country."

The move received support from some of his opponents, including Rust Belt Democrats.

Sen. Bernie Sanders, I-Vt., who denounced the TPP in last year’s Democratic presidential primaries, arguably pushing Hillary Clinton to retract her support for the pact, praised Trump yesterday and said he was glad the deal was "dead and gone."

PHOTO: Democratic presidential candidate Senator Bernie Sanders (I-VT) speaks during an event on the Trans Pacific Partnership on Capitol Hill June 3, 2015 in Washington, DC. Brendan Smialowski/AFP/Getty Images
Democratic presidential candidate Senator Bernie Sanders (I-VT) speaks during an event on the Trans Pacific Partnership on Capitol Hill June 3, 2015 in Washington, DC.

End of a Long Fight

Although the agreement was already considered dead because of its lack of support from either major party's presidential candidate, Trump's signing of the memo nevertheless ended what Thea Lee, the policy director and chief international economist at the AFL-CIO, described to ABC News as a "six year fight" to stop the pact.

Union leaders like AFL-CIO President Richard Trumka and Teamsters General President James P. Hoffa, praised the move in separate statements, suggesting it would protect workers.

Union households — long considered a key component of the Democratic base — helped Trump win the 2016 presidential election. He matched Ronald Reagan's support in that cohort in 1984 — the highest level in that group for a Republican since then, according to ABC News exit polls.

Lee, however, was reluctant to praise Trump so easily for signing the directive.

"The TPP was dead already," she said. "Trump just disposed of the body."

Lee said her organization saw the accord, which President Obama made the centerpiece of his foreign policy pivot toward Asia, as "deeply flawed." She called it a "corporate empowerment agreement," part of a trend of deals that made it easier for companies to ship jobs overseas.

Despite her criticisms of the deal, she said she is reserving judgment on whether Trump's promise to fight for American workers can be believed.

"It's hard to say right now what we can expect from his administration," she said, since some of his proposed appointees — who she said are from the "Goldman Sachs wing of the Republican Party" — appear more likely to support future similar trade deals than his rhetoric would suggest.

Lee also said that it's still unclear what Trump will seek to do with other trade deals, as with his promise to renegotiate the North American Free Trade Agreement.

"Will he label China a currency manipulator?" Lee asked, referring to one of his promises. "That still remains to be seen."

Questions About Cause of Job Losses

Mireya Solis, the Philip Knight chair in Japan studies and a senior fellow at the Brookings Institution, argued in favor of the TPP in the past, praising the agreement for its potential to "enhance American influence in Asia."

She told ABC News that the deal would have had a small but positive effect on American jobs and cited a study by the United States International Trade Commission to support that claim.

Solis said opponents of the TPP "are misjudging the problem," referring to the much discussed decline in American manufacturing jobs. "We're very bad at training American workers to reinvent themselves."

She said that advances in technology were hurting workers more than trade deals like the TPP and that it could have boosted exports.

Robert E. Scott, the senior economist and director of trade and manufacturing policy research at the Economic Policy Institute, who argued against the deal, said the notion that it would have strengthened exports is "simply not coherent," based on the degree to which it would have empowered corporations.

Scott, who voiced skepticism about how effective the TPP would have been in strengthening U.S. influence in Asia, said that the framework of the deal was designed to help "really big companies" and implied that what would have happened to workers as a result of the deal was an afterthought.

"It would have redistributed wealth from the poor to the ultrarich," he said. "This is a win for workers, in my view."