Departing US trade representative (USTR) Michael Froman has admitted to supporting President elect Donald Trump’s plan to combat Chinese influence in trade, but warned that exiting the Trans-Pacific Partnership (TPP) would have the exact opposite effect.
In his final speech in the role, delivered to the Washington International Trade Association, Froman said: “We heard a lot about the importance of being tough on China during this recent campaign. I agree. But here, I have to admit to being a little perplexed. There simply is no way to reconcile a get-tough-on-China policy with withdrawing from TPP. That would be the biggest gift any US president could give China, one with broad and deep consequences, economic and strategic.”
He argued that from a commercial and military standpoint, the US would benefit from growing its influence in the Asia Pacific region, and that were the country to take a step back, the resulting vacuum would most likely be filled by China.
Already, Peru, Chila and Canada have all said that if the TPP filed, they would seek bilateral trade agreement with China.
“As other countries move forward with their agreements, not only will we see opportunities lost, but we will see current market share eroded. Just talk to the cattlemen who are losing US$400,000 to Japan in beef sales to Australia every day TPP is delayed,” Froman added.
Trump’s victory in November’s presidential election virtually marked a death warrant for the TPP – an agreement he has dubbed as “a potential disaster”.
All his trade appointments so far have confirmed his intention to fulfil protectionist campaign promises, and the likelihood of tariffs being imposed on China is now considered real.
Froman will be replaced by openly anti-free trade lawyer Robert Lighthizer under the new administration.