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President Donald Trump took action today to cancel an agreement for a sweeping trade deal with Asia as one of his first official White House actions.
After meeting with business executives to discuss the US manufacturing industry, Trump headed to the Oval Office to sign an executive order formally ending the United States’ participation in the Trans-Pacific Partnership (TPP). The agreement faced a big hurdle making it through Congress, but signals that Trump’s aggressive talk on trade policy matters during the presidential campaign will carry over to his new administration.
Trump drew a hardline on trade during his campaign, and Majority Leader Mitch McConnell (R-Ky.) acknowledged last year that TPP was dead for the foreseeable future.
“That doesn’t mean we don’t trade because we do trade,” Trump said earlier today at the beginning of a White House meeting with executives from companies including US Steel Corp., Lockheed Martin Corp. and Dow Chemical Co. “What we want is fair trade.”
"We've been talking about this for a long time," Trump said after signing the order in the Oval Office, adding that leaving the 12-nation pact is a “great thing for the American worker."
Rather than the multilateral approach taken via the TPP, Trump and his top trade officials favor bilateral agreements instead, believing the US can garner a fairer agreement for US businesses rather than the concessions made to reach an agreement with several nations.
Business groups such as the US Chamber of Commerce and some major commodity and farm groups had lobbied extensively for passage of TPP, touting the deal as an engine of job growth and an important check on China’s growing ambitions.
A US soybean grower group expressed significant concern about the TPP withdrawal. American Soybean Association (ASA) President Ron Moore pointed out the high stakes for soybean farmers, and urged the Trump Administration to immediately announce how it intends to engage and expand market access in the Asia-Pacific region. "Trade is something soybean farmers take very seriously. We export more than half the soy we grow here in the United States, and still more in the form of meat and other products that are produced with our meal and oil," said Moore, who farms in Roseville, Illinois. "The TPP held great promise for us, and has been a key priority for several years now. We're very disappointed to see the withdrawal today."
"Moving forward, we expect to see a plan in place as soon as possible to engage the TPP partner nations and capture the value that we lose with the withdrawal today. With net farm income down by over 40 percent from levels just a few years ago, we need trade deals with the Asia-Pacific countries to make up for the $4.4 billion in annual net farm income being lost by farmers from not moving forward with the TPP. Also, we expect a seat at the table to help ensure these agreements in whatever form they take are crafted to capture their full value for soybean farmers," added Moore. "Trade is too important for us to support anything less.
Sen. John McCain (R-Ariz.) said Trump’s decision to withdraw from the TPP would spark a wave of negative consequences. “President Trump’s decision to formally withdraw from the TPP is a serious mistake that will have lasting consequences for America’s economy and our strategic position in the Asia-Pacific region," McCain said in a statement. McCain added that moving forward the administration should support a "positive trade agenda" in the Asia-Pacific region.
The decision drew quick praise from Sens. Bernie Sanders (I-Vt.) and Sherrod Brown (D-Ohio), who broke with Obama over the agreement. But McCain argued that it is the "wrong decision" that will increase China's economic influence in the region. "It will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it," he said.
Sen. Ben Sasse (R-Neb.) said that pro-trade lawmakers have to do a better job of defending their positions. "It's clear that those of us who believe trade is good for American families have done a terrible job defending trade's historic successes and celebrating its future potential," he said. "We have to make the arguments and we have to start now."
Regarding the North American Free Trade Agreement (NAFTA), Trump said he would soon meet with the leaders of Canada and Mexico to begin the process to see if the accord can be renegotiated. That process could take up to six months. In addition, Trump said he would begin discussions about immigration and border security with each leader during face-to-face meetings in the coming weeks."