Less than a week after assuming office, President Donald Trump signed an executive order abandoning the 12 nation Trans-Pacific Partnership free trade agreement negotiated by former President Barack Obama, but not yet ratified by the U.S. Congress. He then quickly attacked Mexico — abruptly cut short a phone conversation with Mexico’s President Peña Nieto, canceled a meeting with Peña Nieto after demanding Mexico pay for a wall on the U.S. border and threatened to impose a 20 percent border tax on goods exported to the United States based on the North American Free Trade Agreement.

Trump’s trade representative, Peter Navarro, then dropped another trade policy bomb by publicly declaring Germany was manipulating the euro currency unfairly to its advantage, stealing U.S. exports, while similarly exploiting the rest of the Eurozone economy as well.

Trump, meanwhile, continued to declare that China and Japan were also currency manipulators who were taking advantage of U.S. businesses and increasing their exports at the expense of the U.S. Their currencies declined by 8 percent and 15 percent, respectively, in recent months. The Mexican peso fell by 16 percent after the U.S. election and the euro and British pound each by around 20 percent in 2016.

Trump’s flurry of executive orders canceling trade deals, his phone calls to country leaders, his appointed representatives public statements, and his constant tweets on social media suggest to some, including the U.S. mainstream media, that Trump is anti-free trade, that Trump is ushering in a new trade protectionism, and that his attacks on free trade agreements, like TPP and NAFTA, will precipitate a global trade war. It is this writer’s view, however, that none of this is likely.

Trump is a dedicated free trader. He just rejects multilateral, multi-country free trade deals like TPP and NAFTA. He wants even stronger, pro-U.S. business free trade deals and intends to renegotiate the existing multilateral treaties — to the benefit of U.S. multinational corporations and at the expense of the U.S. trading partners. Trump’s threats of protectionist measures, like the 20 percent border tax and previous election promises of imposing a 45 percent import tax on goods from China, are primarily tactical and aimed at conditioning U.S. trading partners to make major concessions once U.S. renegotiation of past deals and agreements begin.

And as for a trade war, the answer is also a very likely “no.” The big ‘four’ targeted trading partners — China, Japan, Germany, and Mexico — currently exchange goods and services with the huge U.S. economy amounting between US$1 to US$2 trillion a year. China-U.S. two-way trade amounts to nearly US$500 billion a year, Mexico about as large, and Japan and Germany also account for hundreds of billions of dollars of trade with the U.S. per year. These are the countries with which the U.S. has the largest trade deficits: China’s about US$360 billion and the largest, Japan’s close to US$80 billion, Mexico and Germany around US$60-$70 billion. Given the large volume of lucrative trade with the U.S., these countries will eventually agree to renegotiate existing free trade treaties and trade arrangements with the U.S.

What Trump trade policies represent is a major shift by U.S. economic elites and Trump toward bilateral free trade, country to country. Trump believes he and the U.S. have stronger negotiating leverage “one on one” with these countries and that prior U.S. policies of multilateral free trade only weakened U.S. positions and gains. But free trade is free trade, whether multi or bilateral. Workers, consumers and the environment pay for the profits of corporations on both sides of the trade deals, regardless how the profits are re-distributed between the companies benefiting from free trade.

Trump’s shift to bilateral trade represents the intent of U.S. economic elites to increase their share of trade profits and benefits at the expense of their capitalist trading cousins. And this is not the first time the U.S. has set out to “shake up” trade relations to its advantage. In 1985 and 1986, when the U.S. under Reagan was losing out exports to Europe and Japan, the U.S. forced Japan to the bargaining table and negotiated the “Plaza Accords,” in which Japan was forced to make major concessions to the U.S. This was immediately followed up by the “Louvre Agreements” with Europe, with the same results.

read full article @ http://www.globalresearch.ca/trump-scraps-the-trans-pacific-partner...