By William Mauldin and Carol E. Lee
WASHINGTON -- President Donald Trump Monday formally pulled the U.S. out of the Trans-Pacific Partnership, the 12-nation trade agreement negotiated by Barack Obama and championed by businesses but that increasingly fell out of favor in both political parties.
Mr. Trump's move fulfilled a promise to end U.S. participation in the proposed TPP deal, which was aimed at pressuring China by eliminating most tariffs and other trade barriers among the U.S., Japan, Canada, Mexico, Australia, Vietnam and half a dozen other countries around the Pacific. China is excluded from the deal.
The memorandum announcing Mr. Trump's decision was largely symbolic, because congressional leaders and the Obama administration had signaled after the November election that there was no path forward for the TPP.
Still, Mr. Trump's decision to bury the agreement in his first week shows he is serious about jettisoning decades of mostly steady trade liberalization in favor of more confrontation with China and other trading partners, with the potential for big tariffs if those countries don't come to the table ready to make concessions. Mr. Trump and his advisers have eschewed multilateral trade blocs.
"We've been talking about this for a long time," Mr. Trump said as he signed the memorandum.
The move is a blow to Asian countries in the pact, including Japan, which had made rare concessions to open its agricultural and other markets, and Vietnam, where the economy was set to receive a significant boost from new investments diverted from China. Beijing likely benefits from the U.S. pullback from the bloc, which was meant to put pressure on Chinese officials to curb government subsidies and support for state-owned enterprises.
The withdrawal from TPP also is a setback for big businesses, eager to invest in fast-growing Asian countries that would have to abide by new rules on everything from disputes with investors to the free flow of customer data across borders.
Business groups recently have said they would ask the incoming Trump administration to salvage the TPP in some form, or at least its provisions and strategic goal of renewing U.S. influence in the Asia-Pacific region.
While congressional Republicans had largely encouraged Mr. Obama's efforts to negotiate and pass the TPP, Democrats in the House and Senate overwhelmingly opposed the deal, backed by labor groups that worried some jobs could shift to Vietnam and Malaysia.
Lawmakers on both sides want Mr. Trump to work in some fashion to open up markets for U.S. exports, enforce existing trade rules and avoid extreme steps that could result in a trade war.
"Withdrawing from the TPP must be a first step, not a last one," said Rep. Richard Neal (D., Mass.,), the top Democrat on the House committee that oversees trade. "We need new rules and better enforcement to make trade a two-way street, particularly in the Asia-Pacific region. "
Last year, while Sen. Bernie Sanders stirred anger about the deal on the left, Mr. Trump made opposition to the TPP and the North American Free Trade Agreement, or Nafta, a key plank in his platform of anger about policies long championed in Washington. Democratic nominee Hillary Clinton also said she opposed the trade pact.
Advisers to Mr. Trump say that after the TPP move he may formally announce in coming days his intention to work with Canada and Mexico on renegotiating or updating Nafta.
Write to William Mauldin at email@example.com and Carol E. Lee at firstname.lastname@example.org
(END) Dow Jones Newswires
January 23, 2017 13:03 ET (18:03 GMT)
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