[CTC] Trump Talks Tough on Trade, but His Team Is Treading Lightly

[Arthur Stamoulis]

https://www.nytimes.com/2017/06/01/us/politics/trump-trade-tpp.html <https://www.nytimes.com/2017/06/01/us/politics/trump-trade-tpp.html>
 
 
Trump Talks Tough on Trade, but His Team Is Treading Lightly

By ALAN RAPPEPORT <https://www.nytimes.com/by/alan-rappeport> JUNE 1, 2017
 
Wilbur Ross, the secretary of commerce, said this week that the Trump administration’s guiding principle on trade was “do no harm.” CreditWin Mcnamee/Getty Images
WASHINGTON — President Trump has called the Trans-Pacific Partnership deal a “rape” of the United States <http://www.msnbc.com/msnbc-quick-cuts/watch/trump-tpp-deal-a-rape-of-our-country-714869827721>. He has scolded Germany for being “very bad” on trade because it runs a surplus. And in April he said that he was “psyched” to terminate the North American Free Trade Agreement with Canada <http://topics.nytimes.com/top/news/international/countriesandterritories/canada/index.html?inline=nyt-geo> and Mexico <http://topics.nytimes.com/top/news/international/countriesandterritories/mexico/index.html?inline=nyt-geo>, only to reverse course.

Despite Mr. Trump’s incendiary talk, his top trade advisers are taking a more cautious approach to dealing with America’s trading partners, striking a more moderate tone than the president but still laying the groundwork for the changes he has promised.

That more moderate tone has come as a relief to those who feared the Trump administration would swiftly usher in a wave of protectionism <http://topics.nytimes.com/top/reference/timestopics/subjects/p/protectionism_trade/index.html?inline=nyt-classifier>, while disappointing some people who hoped that a sweeping rewrite of trade deals would come in the administration’s early days.

Signs of greater moderation were on display this week when Wilbur Ross <http://topics.nytimes.com/top/reference/timestopics/people/r/wilbur_l_jr_ross/index.html?inline=nyt-per>, the secretary of commerce, suggested that the administration would actually try to build off some aspects of the Trans-Pacific Partnership trade agreement, or T.P.P., that Mr. Trump abandoned in January as Nafta renegotiations begin this summer.

Mr. Ross also said that America’s trade deficit with Canada was “blameless” because it was the result of energy needs, rather than misdeeds. And he dismissed the idea that Mr. Trump was really ready to pull out of Nafta.

“The first guiding principle is do no harm,” Mr. Ross said <https://www.c-span.org/video/?429298-1/commerce-secretary-sees-narrow-window-nafta-talks-lays-goals> at a Bipartisan Policy Center forum on Wednesday.

Early moves by Robert Lighthizer, the newly installed United States trade representative, have also been surprisingly conventional.

The language in a letter that Mr. Lighthizer sent to Congress last month giving official notice that the administration planned to renegotiate Nafta strongly echoed the wording used by the Obama administration when it laid out its negotiating objectives for the multicountry T.P.P. two years ago.

Both administrations, for example, called for modernizing the trade agreements for a digital age, addressing competition with state-owned enterprises and developing provisions to protect intellectual property rights.

To trade experts, the similar goals indicated that the problems Mr. Trump and some in his administration have expressed about T.P.P. involved the politics of the pact more than its substance.

“If we could wipe away memories of the 2016 campaign and call T.P.P. something different, it would have support,” said Scott S. Lincicome, an international trade lawyer at the law firm White & Case.

Sharp divisions over trade remain in the White House. Nationalists such as Stephen K. Bannon, Mr. Trump’s chief political strategist, and Peter Navarro, the chief trade adviser, are urging the president to take a more protectionist approach, and officials like Gary D. Cohn, the president’s chief economic adviser, and Steven Mnuchin, the Treasury secretary, are expressing more openness to free trade. Mr. Cohn, Secretary of State Rex W. Tillerson and Defense Secretary Jim Mattis all expressed support for T.P.P. before joining the administration.

The administration is now in the position of trying to reap the benefits that the Pacific trade agreement could have yielded while operating in the framework of the bilateral trade agreements that Mr. Trump prefers. It remains unclear what kind of concessions Mr. Trump will be able to extract from Canada and Mexico in negotiations over Nafta outside the context of a broader agreement.

“In T.P.P., countries agreed to a whole bunch of rules for us because they were getting access to Japan, which they couldn’t get on their own,” said Michael Froman, the United States trade representative under President Barack Obama. “The question now is how Mexico and Canada sell this at home — making these unilateral concessions to us — in exchange for nothing.”

The talks will be Mr. Trump’s biggest test yet as a deal maker on the international stage, and they could determine how other countries approach the administration in future one-on-one negotiations.

Despite Mr. Trump’s contention that multilateral deals are bad for Americans, Mr. Ross said while speaking last week at the US-Asean Business Council, a group that advocates United States companies operating in Southeast Asia, that there were some “good aspects” to the T.P.P. In an interview with CNBC <http://www.cnbc.com/2017/05/30/exclusive-wilbur-ross-says-hes-open-to-resuming-ttip-negotiations.html> this week, he suggested that he was “open to resuming” discussions with European countries about the very similar Trans-Atlantic Trade and Investment Partnership deal that has been frozen since last year.

The Nafta talks are expected to start in August after a 90-day waiting period begun by the administration’s letter to Congress. The administration will offer more specific negotiating objectives in July. Mr. Ross said he hoped that issues surrounding subsidies for Mexican sugar and for Canadian dairy products and softwood lumber could be addressed before the talks begin in earnest.

The administration has said it hopes to reach a deal by January. Major changes to Nafta require congressional approval in the United States and in Mexico. And the resistance of some Republicans to Mr. Trump’s trade agenda could create a rare instance in which he needs the support of Democrats. However, even those Democrats who agree with the president may be reluctant to back such a deal ahead of next year’s midterm elections.

Thus far, progressive groups, which saw trade as an area of potential alignment with the Trump administration, have not been impressed with what they have heard. They are increasingly concerned that Mr. Trump may end up on a path to what they call “T.P.P. 2.0,” and that grand plans to make trade deals fairer will not pan out.  

“I see that the administration may be backing itself into another T.P.P. debacle where they spend time negotiating an agreement that they cannot get through Congress or they negotiate that would have the opposite outcome of what Trump promised in terms of lowering the trade deficit and bringing back manufacturing jobs,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “In which case it could become an political albatross around his neck.”




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