A TPP Without the U.S.

In the middle of President Trump’s underwhelming Asia trip, other countries in the region took the opportunity to make some real progress on trade liberalization. Remember the Trans Pacific Partnership (TPP), the Asia Pacific trade deal from which President Trump withdrew soon after taking office? Well, this past weekend, the remaining countries made some pretty good progress in getting the deal done on their own, without the United States. They may have even made it better in two areas (the Cato Working Paper assessing the original TPP is here). 

The deal is not done yet, as some countries have raised additional issues they want changed. But it’s getting close.

One key aspect of this new TPP deal is that the “TPP 11” (that is, the countries other than the United States who are part of the TPP talks) would like the United States to rejoin at some point. Clearly, that is not going to happen during the Trump administration, but perhaps it could under some future administration. To allow for this possibility, the changes the TPP 11 have made to the deal are not permanent, but rather just “suspensions” of the previous terms. There were a few provisions that the United States pushed for, but many other countries did not want. These provisions will be suspended for the time being, but could be restored to their original form if the United States wants to join later.

There is also an issue that may seem minor and technical, but could be a problem for having the United States join later, which is the new name for the agreement. It is now called the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).” Besides being an unwieldy name, putting the word “progressive” in there will not be good for U.S. politics. For one thing, most high-profile American progressives don’t like any trade agreement, so calling it progressive is not likely to get them on board. In addition, libertarians, conservatives, and others are going to be wary of anything labeled progressive. This new name seems like a big mistake to me (especially given that the agreement is not, in fact, progressive in the way that most people would use that term!).

The larger point here is that the rest of the world is moving forward on trade liberalization, while the United States is doing next to nothing. Perhaps when U.S. businesses start to feel the impact of all this, the Trump administration will begin to do something productive on trade, but for now, it feels like we are mostly going backward.