Former USTR Cites Protectionism as Obstacle to Trump Agenda, Pushes for More Trade Deals
The biggest danger to President-elect Donald Trump’s agenda might be trade protectionism and the incoming administration should build upon the U.S. trade manufacturing surpluses it currently holds over free trade agreement partners, former U.S. Trade Representative Robert Zoellick wrote in an opinion piece published by the Washington Post (here). “Whether the Trump administration negotiates country by country, or with groups, it must not ignore the economies of the Asia-Pacific and the potential of the Trans-Pacific Partnership,” Zoellick said. “In today’s competitive world economy, the United States cannot withdraw in a huff; retreat is defeat.”
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The U.S. has FTAs with 20 countries that account for almost half of U.S. exports, and in the first five years of these deals, U.S. exports increased three times more quickly than global export growth, he wrote, noting that about 60 percent of U.S. imports “are for intermediate goods that lower costs for U.S. producers.” Zoellick, who was U.S. trade representative under President George W. Bush, also said Congress should push for more FTAs, possibly with Brazil and Argentina. To start, Trump’s trade team should consider negotiating a bilateral FTA with the United Kingdom, which could mitigate Brexit impacts to the UK, Zoellick said.
Trump should unite with Mexico to compete against China, and could look to improve NAFTA by negotiating several new standards, Zoellick wrote. Trump’s Asia-Pacific trade policy should first seek to prevent currency manipulation, perhaps through countervailing maneuvers targeting governments that have large currency reserves and trade surpluses with no “security justification” for buying dollars to depreciate their currencies, he said. Congress should approve this authority for potential use against any country with tradeable currency, including Japan and China, he added. Commerce secretary nominee Wilbur Ross, who Trump Transition Team officials have said will be more active in setting trade policy than predecessors, should negotiate reductions in Chinese metal production capacity, as well as transparent constraints on subsidies, “favorable finance” and other “unfair distortions” created by state-owned enterprises, Zoellick said.