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 world marked a turning point in global trade on Tuesday, when 11 countries agreed to join the Trans-Pacific Partnership, announcing they had finalized the pact and expected to sign a deal on March 8 in Chile. It was a remarkable moment for a beleaguered agreement that was conceived and constructed by the United States, then abandoned by Washington when Mr. Trump took office last year.
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.
Thirty-five new bilateral and regional trade pacts are under consideration around the world, according to the World Trade Organization. The United States is party to just one of them, with the European Union, and that negotiation has gone dormant. The United States 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.”
In July, Japan signed a wide-ranging new trade deal with the European Union — a step the Japanese prime minister, Shinzo Abe, referred to as hoisting “the flag of free trade high amidst protectionist trends.” The European Union pushed ahead with a major update to its agreement with Mexico, while China pursued a pan-Asian agreement, among other deals.
Business interests in the United States are watching with alarm as other countries strike agreements that exclude American exporters. For example, 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.
Kent Bacus, the director of international trade and market access for the National Cattlemen’s Beef Association, said Tuesday that the United States’ withdrawal was “a missed opportunity for the United States to gain greater access to some of the world’s most vibrant and growing markets.
When the full effect of this kicks in -- particular should Trump withdraw from NAFTA -- it's going to get very ugly, very fast. The only question is how much worse than the Great Recession of 2008 will it be, and how many millions more jobs will be lost.
And this time, we won't have a stimulus package or, you know, a competent administration, to get us out of the deep hole we're going to be in for the next decade. The damage will be catastrophic. And the rest of the world?
They'll pick up the pieces without us and just move on.
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