January 26, 2018 10:05AM

Leading from Behind on Trade

Right after he took office, President Trump famously withdrew from the 12 nation Trans Pacific Partnership (TPP) trade agreement that the Obama administration had negotiated. That was not too surprising, given that during the campaign, he had referred to the TPP as “a continuing rape of our country.”

But the other 11 TPP nations decided to move forward without the U.S., and on Tuesday they were able to agree on a revised deal (with key changes to the text undertaken in the form of suspensions, so that the original provisions can be reinstated if the U.S. decides to rejoin). By Thursday, President Trump seemed to be rethinking his TPP opposition:

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.

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.

Following up on these remarks, he said this in his speech in Davos today:

As I have said, the United States is prepared to negotiate mutually beneficial bilateral trade agreements with all countries. This includes the countries in TPP 11, which are very important. We have agreements with several of them already. We would consider negotiating with the rest, either individually, or perhaps as a group, if it is in all of our interests. 

What should we make of all this? Perhaps Trump is deviously trying to disrupt the momentum of the TPP 11, by encouraging the others to slow down and wait for the U.S.? More likely, TPP was in the news, and Trump therefore decided to talk about it in his usual incoherent way. I encourage reporters to press Trump and other U.S. trade officials on what exactly the U.S. has in mind now for the TPP, but I would be surprised if these remarks signal any change in U.S. trade policy.