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Setback For Neoliberalism: Trump Dumps TPP, Will Renegotiate NAFTA

President Donald Trump reportedly signed executive orders that will remove the United States from the Trans-Pacific Partnership (TPP) and start a renegotiation of the North American Free Trade Agreement (NAFTA). It increases the possibility that the Trump administration will deliver a fatal blow to neoliberal globalization.

That such actions came from a Republican president is remarkable given the party’s recent history of support for neoliberalism, though the popularity of “free trade” has considerably diminished among the electorate. Both major party candidates in the 2016 cycle-former Secretary of State Hillary Clinton and Trump-campaigned in opposition to TPP.

Based on voting patterns, it apepars those in states devastated by recent trade agreements and neoliberalism-the so-called “Rust Belt”-did not find Clinton’s conversion to fairer trade practices sincere. Clinton negotiated TPP and praised the deal before opposing it and was also on record praising NAFTA, which was signed into law by her husband, President Bill Clinton.

President Trump’s vision on trade seems to involve returning to bilateral state-to-state trade deals instead of transnational deals like TPP and NAFTA. This also raises the question as to whether Trump wants to stay in transnational institutions like the World Trade Organization (WTO).

The WTO, which controversially includes China, is an instrument to break down state power in favor of transnational corporate power. If Trump is truly a nationalist on trade, will he also have the United States leave the WTO?

This is the difficulty with understanding the Trump Administration’s trade policy. President Trump’s trade positions have a nationalist flavor but do not connect with an explicit agenda. It is hard to nail down what he is likely going to do in each situation. Trump maintains a flexibility and unpredictability he seems to enjoy.

He has said he will punish American companies that ship jobs overseas by putting a tariff on goods they try to ship back to the U.S., but the Carrier deal Trump struck allowed some jobs to go to Mexico with no proposed tariffs (at this point).

Other companies have said they will keep more jobs in the U.S. because of President Trump, but the details get hazy as to whether some of these investments were already planned.

If Trump continues to rely on ad hoc trade policy, based on brow beating various CEOs in the news, it is possible fewer companies will outsource jobs for fear of Trump’s wrath. Then again, if those companies can get away with playing a public relations game where they happily credit Trump for saving jobs while doing what they want to do anyway, is that really progress?

The benefit of a true fair trade policy is not just that it undermines the dark forces of neoliberalism. Rather, it is that an equitable position under law thwarts gamesmanship.

President Trump revels in gamesmanship and appears happy to fight with companies in the media. While that’s entertaining and could help save some jobs, the only way to truly end unfair trade practices is to stop the games altogether and force companies to play by a new set of universal rules.

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Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.