Trump signs TPP executive order
Source: © Ron Sachs DPA/PA Images

Donald Trump has just put the brakes on the world’s biggest trade deal

It’s been a busy first day at the office for Trump as he starts making good on his promises

From abortion, to healthcare, to public sector hiring, Donald Trump spent Monday pushing through laws before they get to Congress.

Pretty impressive if you consider average productivity levels on a Monday morning. And he squished one more thing in: an executive order blocking US involvement in the controversial Trans-Pacific Partnership (TPP)  agreement, one of his biggest campaign policies.

So what's going on here?

TPP stands for Trans-Pacific Partnership. It was basically an agreement between the countries that border the Pacific Ocean (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam), and would have made it easier, and cheaper, for them to sell goods to each other, by eliminating thousands of  – i.e. taxes on imports or exports. In exchange for easier market access, countries would have to buy into complying with certain environmental standards and workers rights.


Now that't what I call a Trans-Pacific Partnership, amirite?

Confusingly, this is not the same as the Transatlantic Trade and Investment Partnership, or TTIP – a deal between the EU countries and the US. That one’s still in very early stages, but negotiations might get difficult if Trump keeps up his anti-trade deal stance.

To be honest, it’s all pretty confusing. The definition of an executive order (the power he used to make these laws) is really hard to get your head around. Even the Congressional Research Service said there's no direct “definition of executive orders, presidential memoranda, and proclamations in the U.S. Constitution. There is, likewise, no specific provision authorizing their issuance”. Glad it's not just us then.

Talk to me about my life, where does it fit in?

To be totally honest, it’s not clear how much of a difference this executive order will make, mainly because no one's sure if the deal would actually have gone through even without Trump's orders. It hadn’t been passed by Congress, and only one country, Japan had actually finalized the deal.

Its supporters say it would have boosted the US economy and improved the country's position in a part of the world where China’s influence tends to crowd out anyone else.

In Obama's own words, "When more than 95 percent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy. We should write those rules."

But, one of the major criticisms of this kind of deal is that although it might look like it’s doing the economy good – making the sale of US products abroad easier and benefiting the environment – some fear that agreements like this put the interests of big businesses (the ones that will be doing the trading) before ordinary citizens, particularly because of the power it would give foreign companies to challenge US regulation and laws.

And, although people who supported the deal thought it would be good for workers' rights, both in the US and overseas, the people who opposed it said it would actually harm US manufacturing workers. According to the Economic Policy Institute, a left-leaning US think tank, working class Americans have already lost $1,800 annually due to similar trade deals, because companies have chosen to operate in countries with lower wages. This deal would make that kind of choice even easier.

So what are the values behind the economic ideas here?

The back and forth is about two big things, which in the end, are a question of values and politics rather than a battle of numbers: One, what kind of relationship the US economy should have with other countries, and two, what the best way is to secure a strong market for American goods while also protecting American workers and customers.

Obama had a more global approach – lowering tariffs on American goods abroad would make them more affordable to foreign customers, boosting trade, boosting business, boosting profits.

Trump has more of what's called a 'protectionist' approach, which is where his big 'America First' economic idea comes from. He thinks closing borders and protecting American industry from being undercut by low prices abroad is the way to strengthen the US economy.

One of the interesting things about TPP is that it was hated by figures on both the left and right of US politics. Bernie Sanders, the left-wing potential democratic candidate, had said, for example, that trade deals like this had “cost us millions of decent-paying jobs”, and many Democrats in Congress thought it would hurt industry. Same economic decision, different side of the political spectrum.

As Sanders said yesterday, “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.”

So wait, they all agree?

Is this story in a place people can find it?

Short answer: yes. The world is watching Trump’s first moves really closely, which means he can barely breathe without it being reported on, and argued about somewhere. 

The bigger question here though is how easy is it to find out exactly what’s going on. In fact, it took Wikileaks’s involvement to bring the contents of the talks to light (and turn the public against it). It started to look more and more as though the US knew that if they were open about negotiations, they'd be facing negative public opinion.

Senator Elizabeth Warren summed it up: “If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the United States.”

On another transparency note though, Trump is trumpeting (we know!) the decision to bring an end to the treaty as very much his doing. In a sense that’s true; he has now signed an order that means it can’t happen under his presidency. But as we’ve already established, the treaty hadn’t been signed yet and had huge opposition from US politicians, so it could very easily not have happened anyway. You’re unlikely to hear Trump say that though!

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