The Trump Administration’s Trade Policy and the Implications for Southeast Asia

As promised, on 23 January 2016, President Donald Trump withdrew the United Sates from the completed negotiations on the Trans-Pacific Partnership (TPP). In the process, as he did prior to taking office, he stressed his preference for bilateral trade deals. The executive order he signed was a highly symbolic act. The President needed only to refrain from sending the agreement to Congress. His signature, however, served to underscore the finality of his decision. The message: Not only is the United States pulling out of TPP, but neither will it seek to “fix” the agreement. Similarly, his emphasis on bilateral deals is a determinative sign that the idea will not be resurrected under a new guise.

Trump is taking a new approach to trade that has no place for multilateral trade agreements. At best, America appears headed towards a period of consolidation focused on enforcement issues, renegotiation of select agreements and a limited number of new bilateral deals. This would constitute a relatively conventional approach, yet a nationalist one. At worst, the Trump administration could be headed for an unconventional, very hardline approach that tests its constitutional authorities and international treaty commitments. Whichever way it goes, US trade policy going forward will have a major impact on America’s role in the Asia Pacific broadly and in Southeast Asia, in particular.

The push for free trade in America — from President Bill Clinton through Presidents George W. Bush and Barrack Obama — was made possible by big Republican majorities in Congress. Since approval of the North American Free Trade Agreement (NAFTA) in 1993, which garnered 132 out of 175 Republican votes in the House of Representatives, approval of free trade agreements (FTAs) have become only more dependent on Republican votes. In 2003, the US–Singapore FTA passed the House of Representatives with 197 Republican votes. The US–Korea Free Trade Agreement (KORUS) passed with so many Republican votes in the House that it required no Democrat votes, and in the event, only received 59. As recently as 2015, Trade Promotion Authority (TPA), which was vigorously supported by President Obama, was passed with only 28 Democrat votes.

Then suddenly in 2016, this dynamic changed. During an election year, Republicans refused to take a Democrat president’s FTA across the finish line, and their candidate for president, Donald Trump, was actively opposed to them doing so. In part, one can blame bad timing. It was terrible judgement by President Obama to propose an FTA for Congressional consideration during an election year. His determination to sell the agreement as the “most progressive” in history was another serious miscalculation, given that the votes required to pass it would hardly come from progressives.

The impasse, however, was not only a matter of politics. On Capitol Hill, opposition germinated less from a concern with the sort of unfair trade practices that garner so much election year focus than with Republican concerns over the impact on US sovereignty. Key Republicans were concerned about the power of a new international trade bureaucracy presumably required by such a wide ranging agreement. The principal voice of opposition in the Senate was very early Trump supporter, and new Attorney General, Senator Jeff Sessions. Sessions had voted for all of the Bush era FTAs and the three — US–Korea, US–Colombia and US–Panama — which were negotiated by Bush and passed during the Obama administration. Sessions was worried, however, that TPP would “enmesh our great country, and economy, in a global commission where bureaucrats from Brunei have the same vote as the United States” and “empower unelected regulators who cannot be recalled or voted out of office”.¹

This context helps establish two things. One, the idea of a multilateral deal along the lines of TPP is truly dead, at least as far as the United States is concerned. And two, its death is not a reliable indication that the pro-trade nature of the Republican caucus in Congress has changed. When President Trump determines the new bilateral deals he is prepared to pursue, he will enjoy the support he needs in Congress...