Europe moves to pick up free trade scraps as Trump ditches TPP

US President Donald Trump wants to see the European Union break up. [Joseph Sohm/ Shutterstock]

President Donald Trump signed an executive order formally withdrawing the United States from the 12-nation Trans-Pacific Partnership trade deal yesterday (23 January) as Europe sniffed a chance to pick up the free trade the US is turning its back on.

At a ceremony in the Oval Office, Trump officially began the process of dismantling the agreement, which had been put together by his predecessor, Barack Obama, and the new president called the TPP order a “great thing for the American worker”.

The decision has already drawn domestic criticism, as Senator John McCain, a former Republican presidential candidate, said it was a “serious mistake” and would “have lasting consequences for America’s economy and our strategic position in the Asia-Pacific region”.

Moscovici: 'Trump will bring more nationalism and protectionism'

Commissioner for Economic Affairs Pierre Moscovici agrees with the ‘wait  and see’ approach toward new US President Donald Trump mostly shared by the global elite in the in Davos. But he sees more nationalism and protectionism coming from the White House.

TPP has been signed by 12 countries, including Australia, Canada, Japan and Singapore.

A spokesman for Canadian Foreign Affairs Minister Chrystia Freeland, who infamously left Brussels on the verge of tears when it looked as if the EU-Canada deal (CETA) was dead in the water, would only comment that “the agreement cannot enter into force without the United States”.

Canada will therefore be hoping that CETA is able to negotiate another hurdle today as the European Parliament’s Trade Committee decides whether the deal should go before a full vote in Strasbourg next month.

“We have an important friend and ally who seems to be at least partly disengaging from the international scene promoting less trade, more protectionism,” EU Trade Commissioner Cecilia Malmström told MEPs, in a direct reference to the US.

“We need to stick together with like-minded partners to show that these trade deals are actually functioning, and what better partner can we have than Canada,” she added.

Future of EU trade deals in doubt after Singapore ruling

A decision regarding the European Union’s trade deal with Singapore could have far-reaching implications for future agreements, after the EU’s top lawyer said the European Commission could not finalise the deal without member state approval.

Malmström’s efforts may shift completely onto securing CETA, as her other major project, the Transatlantic Trade and Investment Partnership (TTIP), with the US appears to have little to no chance of progressing, if Trump’s TPP decision is a true indicator of his administration’s trade policy.

Nothing is certain at the moment, as Trump has pledged to put “America First” as well as assuring leaders like UK Prime Minister Theresa May that work on a bilateral trade deal will start as soon as possible. Barack Obama previously warned the UK that they would be “at the back of the queue” as a result of Brexit.

TPP’s other economic powerhouse, Japan, remained hopeful, however, that the deal could be saved and an adviser to Prime Minister Shinzo Abe said that “we do have a window until 2018, when the treaty needs to be ratified. We believe we still have an opportunity to convince the US about the importance of free trade.”

Tokyo targets EU trade deal by end of 2017

The Japanese government plans to accelerate talks with the EU, aiming to sign a free trade deal with the bloc this year, according to Japanese news outlet NHK. EURACTIV Spain reports.

French President François Hollande was in Colombia at the start of this week to sign a number of agreements on tourism, education and security, and the outgoing head of state insisted that he would seek to bolster trade and investment with the Pacific Alliance trade bloc in joint negotiations with the European Union.

Hollande made indirect mention of Trump, saying that while some countries are seeking changes to trade agreements, Europe and France want to expand their ties. He branded protectionism “the worst response” to global challenges.

Senator Bernie Sanders, former Democrat presidential candidate: Now is the time to develop a new trade policy that helps working families, not just multinational corporations. If President Trump is serious about a new policy to help American workers then I would be delighted to work with him. For the past 30 years, we have had a series of trade deals… which have cost us millions of decent-paying jobs and caused a ‘race to the bottom’ which has lowered wages for American workers.

Ron Kirk, former US Trade Representative (2009-2013): We're now going to be competing against other countries who are going to reduce over 18,000 tariffs. Those tariffs will now stay in place for the US. This is going to be devastating for American farmers and ranchers and businesses.

 

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