11 Jan 2017

Scrapping TPP 'a miscalculation of enormous proportions'

11:20 am on 11 January 2017

Scrapping the Trans-Pacific Partnership (TPP) would push traditional US allies in the region "into China's arms", the departing chief trade negotiator in the US has warned the Trump administration.

Outgoing US Trade Representative Michael Froman

Outgoing US Trade Representative Michael Froman Photo: AFP

Congress has not approved the TPP, which the United States, New Zealand and 10 other countries agreed upon in October 2015.

In his final speech as US Trade Representative (USTR), Michael Froman said he agreed with Donald Trump's plan to take a tough stance on trade with China, adding that the Obama administration has filed 15 challenges to that country's practices at the World Trade Organization over eight years.

He said withdrawing from the TPP would create a vacuum that China would fill as it draws countries into its own free trade deal.

"There simply is no way to reconcile a get-tough-on-China policy with withdrawing from TPP," Froman in remarks to the Washington International Trade Association. "That would be the biggest gift any US president could give China, one with broad and deep consequences, economic and strategic."

President-elect Trump has pledged to issue a formal notice of withdrawal from TPP on 20 January, his first day in office. He frequently criticized the trade deal during his campaign, calling it a "rape of our country".

Mr Froman said withdrawing would "abdicate" US leadership in the Asia-Pacific region and effectively push traditional US allies in the region "into China's arms".

China is negotiating a 16-country trade bloc that he said would set lower standards for labor, the environment, intellectual property rights, internet freedom and other key areas.

"It would be a strategic miscalculation of enormous proportions," said Mr Froman, who spent all eight years of the Obama administration, both as a White House deputy national security adviser and as USTR, working to promote and negotiate the TPP deal.

"Why would we cede our role as a Pacific power?" he said. "Does anyone really think US interests are better served if China, rather than the US, writes the rules of the road?"

Without the TPP, he said, new export opportunities would be lost and current export market share would be eroded.

Froman's successor will be Robert Lighthizer, a veteran Washington trade lawyer who has taken a more protectionist route, working through the Commerce Department to erect tariffs to benefit the US steel industry and other manufacturers.

Mr Lighthizer was deputy USTR in the Reagan administration at a time when the United States took a tougher stance against a flood of imports from Japan.

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