U.S. President Donald Trump has suggested that his country could return to the Trans-Pacific Partnership (TPP). His remarks come a year after he assumed office and announced a departure from the accord, criticizing free trade and promulgating an "America First" policy. This is the first time since then that he has signaled a possible return to the pact.
Trump's true intentions remain unclear. It may simply be hinting at the move to hold back China, with which the U.S. has its largest trade deficit. The United States, a previous supporter of the TPP, had originally aimed to build a major economic bloc in the Asia-Pacific region to counter China. Only recently Trump announced emergency import restrictions on solar panels, with China in mind.
Or, the president's latest statement could also be read as a signal that Washington may review its trade strategy.
Japan and 10 other countries have agreed on a "TPP 11" deal without the U.S., and the Washington is now concerned that it could get left behind in Asian economic partnerships, which are expected to grow. Calls for a return to the TPP have accordingly emerged from U.S. industries. If Trump moves toward amending Washington's position on the free trade accord in line with the 2018 midterm Congressional elections, we would see this as a positive step.
First of all, the economic effects of the TPP would be greatly enhanced. Without the U.S. the TPP represents a little over 10 percent of the world's economy, but with the U.S. participating that figure would jump to 40 percent, and the TPP would achieve its original objective of covering much of the Asia-Pacific region.
In the postwar era, the system of international free trade is what has supported the world economy. It was the U.S. that led collaboration between countries, and it also led TPP negotiations. If the U.S. were to return, the partnership would become an axis of stability and growth in the region.
That said, Trump has not backed down on his "America First" policy. He continues to emphasize bilateral negotiations favoring the U.S., and has stressed that renegotiation of the TPP would be a condition for America's return.
There is a serious possibility that Washington would look to review details of the agreement that were in place before the departure of the U.S. and request terms favorable for America. Japan would come under pressure to further open up its markets, including to agricultural produce.
The TPP is a complicated arrangement of the interests of each participating country. If it were renegotiated, then it could become tangled, making it difficult for the parties to come to an agreement.
Furthermore, if the U.S. brought protectionist demands to the table, then liberalization of markets could start to recede. The effectiveness of the TPP would be weakened, and in the end, this would not benefit America.
The Japanese government is reluctant to renegotiate the TPP. First of all, the agreement should go into effect among the 11 participating countries to create a solid foundation. After this, Japan should work to persuade the U.S. to return.