The
urban media is increasingly paying attention to the evolving U.S. trade policy
these days. For example, the New York Times reported this week that President
Trump is arriving at the World Economic Forum in Davos, Switzerland, to explain
his “America First” approach at a moment when the world is moving ahead with a
trade agenda that no longer revolves around the United States.
The
Times noted that the world “marked a turning point in global trade on Tuesday,”
when 11 countries agreed to join the Trans-Pacific Partnership. They announced
the completion of the pact and expected to sign a deal on March 8 in Chile.
As the
world’s largest economy, and architect of many international organizations and
treaties, the United States remains an indispensable partner. But as the global
economy gains strength, Europe and countries including Japan and China are
forging ahead with deals that do not include the United States the Times
warned.
Thirty-five
new bilateral and regional trade pacts are under consideration around the
world, the Times says. The United States is party to just one of them, with the
European Union, and that negotiation has gone dormant. At the same time,
theU.S. is also threatening to withdraw from one of its existing multilateral
agreements—the North American Free Trade Agreement with Mexico and Canada—if it
cannot be renegotiated in the United States’ favor.
“Maybe
there was some sort of presumption on the part of the president and his team
that if the U.S. said stop, this process would come to a halt,” said Phil Levy,
a senior fellow at the Chicago Council on Global Affairs and an economist in
the George W. Bush administration. “What this shows is that’s not true. The
world just moves on without us.”
So now,
business interests in the United States are “watching with alarm as other
countries strike agreements that exclude American exporters,” the Times says.
It notes that ranchers in Canada and Australia will be able to sell beef at
lower prices in Japan than their American competitors, who will be subject to
higher tariffs because the United States is not party to the Trans-Pacific
Partnership.
The Trump
administration has pushed back against claims that the America First doctrine
is isolationist. While advisers have continued to criticize global
institutions, they insist their goal is to improve, not destroy, them. Mr.
Trump and his advisers say that the United States will be pushing ahead with
new trade deals — ones that will ultimately be better for American companies
and their workers.
Yet the
willingness of countries to engage with the United States is unclear, as global
leaders observe the Trump “administration’s approach to renegotiating trade
pacts with Canada, Mexico and South Korea.
In
Davos, at a forum long considered the center for globalization, the
administration’s America First message has not been entirely well received. On
Wednesday, comments by Wilbur Ross, the commerce secretary, that American
troops were “coming to the ramparts” in what he called a continuing global
trade war prompted blowback from other state leaders.
Chancellor
Angela Merkel of Germany warned on Wednesday that “protectionism was not the
answer” and called right-wing populism a “poison,” in a speech largely seen as
a rebuttal to Mr. Trump before his expected speech today.
So far,
it is unclear which countries the United States could be courting to create new
trade deals. Britain has expressed interest in a bilateral deal with United
States, but talks could not begin until it finishes extricating itself from the
European Union, which does not look likely to be resolved soon.
Japan,
the preferred partner for many American businesses, appears to have spurned the
United States’ offer to forge a trade deal one on one, after Mr. Trump pulled
the United States out of the Trans-Pacific Partnership.
And
China has positioned itself as a global leader — a sharp change from the early
1990s, when the leader at the time, Deng Xiaoping, cautioned his countrymen to
“hide your strength and bide your time.”
In
addition, China has set about building its own vision of an international
order, including an Asian investment bank to rival the World Bank, and its
global infrastructure project, One Belt One Road.
The
Trump administration’s more aggressive stance toward allies and adversaries may
shift this balance in China’s favor. At an event on Tuesday in Washington, Juan
Gabriel Valdés, the Chilean ambassador to the United States, contrasted Chile’s
now warm relationship with China with the United States’ more combative stance
on trade, especially in its negotiations over NAFTA.
“The
United States continues to be, and will probably be in the next 10, 20 years,
the main partner of the Latin American region,” he said. “But change is there.
It’s written on the wall if this continues like it is.”
So, the
administration’s trade policy will continue to be tested in Canada and Mexico,
and elsewhere, and with China and other global trading partners as the economy
strengthens—developments producers should watch closely as they emerge,
Washington Insider believes.
