President Trump's prompt decision to leave the TPP alongside his appointments to key government positions show the degree to which he is determined to overcome the resistance of the establishment and avoid any guidance from it in domestic or foreign policy. Trump demonstrated the shift to a self-centered great-power foreign policy that is incompatible with US global leadership as it was understood during the Cold War.
The decision by Donald Trump to withdraw the United States from the Trans-Pacific Partnership (TPP) agreement did not come as a surprise: the president-elect has consistently criticized the trade deal while on the campaign trail, promising to make abandoning the TPP one of the key priorities in the first 100 days of his presidency. The new president has zealously sought to deliver on his campaign promises and dismantle the few foreign policy achievements of the Obama administration along the way. The new administration has yet to be fully staffed, with some insiders even saying that neither Trump, nor his close associates have any idea who will be appointed to the positions of deputy secretary of state or deputy secretary of defense, or to the key posts in the National Security Council. Nevertheless, the president used his first full work day to take a momentous decision for the country and the whole world.
Apart from abandoning the TPP, Trump also said that he was willing to renegotiate the North American Free Trade Agreement (NAFTA), a vital trade pact for the US and for the whole global economy. Signed by President George Bush and enacted by President Bill Clinton, it has so far benefited from bipartisan support. Although NAFTA is largely viewed as a pillar of US economic power in the region and in the world, attacking it was one of Trump’s main campaign messages to underscore his protectionist strategy to return jobs to the US. It has yet to be seen whether NAFTA can be renegotiated or remain in force.
What does this all mean?
First, it means that President Trump is serious about delivering on at least some of his key campaign promises. Up until his inauguration there were many who had doubts in this respect. Taking into account the controversial nature of the populist measures advocated by Trump in terms of security, the economy and the international standing of the US, a number of observers believed that once in the Oval Office, the new president would maintain his populist rhetoric, while adopting a policy that would be more moderate and consistent with the common denominator of preferences within the US establishment. It is now becoming clear that it is not going to happen. It turns out that Trump’s statements before and after the election must be taken seriously. He has been consistent in his statements about the TPP, NAFTA and the desire to refocus on bilateral trade deals, as well as building a wall on the border with Mexico, tightening migration policy, criticizing NATO and the willingness to “do business” with Moscow.
There is now little doubt that Trump will deliver on his domestic policy promises (the economy, jobs and immigration). It is the domestic agenda that matters the most for him, just as for any other US president and even more so for his voters. Only time will tell whether Trump will make good on his foreign policy promises, or whether they will serve as a bargaining chip in his relations with a US political elite still shell-shocked by the new president’s first moves. In any case, his ideas have become a matter of concern for allied countries.
It also remains unclear how the new administration intends to deal with other economic and immigration issues. After all, withdrawing from the TPP is the easiest thing to do: the partnership never took effect, so by abandoning it Trump does not lose anything (apart from the foreign policy consequences). This was a stunning decision in terms of its PR effect that can hardly be achieved on other issues, including NAFTA.
Second, this prompt decision to leave the TPP alongside his appointments to key government positions show the degree to which Trump is determined to overcome the resistance of the establishment and avoid any guidance from it in domestic or foreign policy. So far, the new president has been quite pugnacious with his promises to “drain the swamp” in Washington. In his inauguration speech, he talked about transferring the power from the Washington elite to the people. He is also famous for his hallmark “You’re fired” phrase. Again, only time will tell whether he will be able to keep ignoring the establishment and the elite, or whether this attitude will go beyond relatively easy steps such as abandoning the TPP.
Third, this decision shows that the US is leaning toward unilateralism in trade and intends to adopt a more mercantilist and somewhat protectionist foreign policy. Bilateral FTAs could become the main foreign economic policy framework for the US outside the WTO, enabling Washington to negotiate, or rather demand, better terms. Countries unwilling to sign deals of this kind or violating them would face protectionist measures, the actual scale of which has yet to be seen.
There is nothing extraordinary about unilateralism in foreign trade, even from a major economy, but not the world’s biggest economy. After all, this was Washington’s foreign trade policy until the second half of the 20th century when it positioned itself as the head of the global trade regime within the GATT-WTO framework. The problem is whether the US will be able to retain its leadership in the liberal economic world order and preserve this world order in general.
The US has made several attempts to create mega-free-trade zones since George Bush’s and Bill Clinton’s presidencies, seeking to cover most of the world and place itself in the center of global trade and economic relations by creating a US-centered global economic order (TAFTA, FTAA, etc.). In this regard, by promoting TPP and TTIP, the Obama administration acted in line with the strategy the US has been following since the end of the Cold War. The regulations it offered changed, but the idea behind them remained the same. i.e. to create US-led mega-regional communities that would provide a foundation for a new global trade and investment order, among other things, sooner or later forcing countries like China to accept “the rules written in Washington.” Washington focused on establishing a US-centered economic order, and in pursuing this political objective was willing to make substantial concessions to Asian countries.
Now the focus seems to be shifting toward protecting the national economic interests of the US in the narrow, egoistic sense. By abandoning the TPP and switching to bilateral agreements, Trump is making it abundantly clear that the interests of a Delaware farmer or a worker from Detroit are much more important for him than the economic world order. The new US president is ready to sacrifice US leadership in setting international rules and dominating global institutions in order to make the US stronger internally.
In doing so, he draws a line under more than 50 years of a world economic order that took shape in the 1940s in Bretton Woods and Havana. Of course, this order will remain in place, and so will the propensity for setting up mega-regional free-trade areas. After all, the Regional Comprehensive Economic Partnership (RCEP) is still in the making in East Asia (and now that the US has withdrawn from the TPP it can be created even faster), and the creation of a free-trade area by ASEAN remains on the agenda. The only thing that may disappear is the US leadership in setting universal rules, norms and institutions. The international economic order will become more fragmented, heterogeneous and less American.
Fourth, and most importantly, this decision shows that the America First principle is about to become central for the new US administration not only in terms of trade policy, but also in foreign policy and foreign economic relations, just as Trump had promised during the campaign. What this really means is that from now on when it comes to international economic or political affairs, the US will be guided in its foreign policy by the concept of unilateralism, following in the footsteps of George W. Bush or even surpassing him. National security and a narrow understanding of national benefit will matter more for the Trump administration than global leadership, global order or solidarity with allies. In fact, allies are something abstract for the new administration. They do not give anything to US workers, farmers or business people, and are a burden for them.
If this is so, the new administration would be less eager to back Poland and the Baltic states and even less Ukraine in order to contain Russia, will show less solidarity toward Saudi Arabia regarding Islamists in the Arab world and will be more willing to share the onus in resolving security issues in Europe, Asia and in the Middle East. This creates new opportunities in Russia-US relations. However, the same unilateral approach could mean the Trump administration will become more aggressive toward Iran, and even reconsider the 2015 nuclear deal. The US could also become more aggressive toward North Korea, resume preventive strikes, violate international law, create a strategic missile defense system and possibly step up efforts to contain China, while ignoring the interests of its regional allies. This in turn will create new risks for Russia, as well as restrict its relations with the US.
Fifth and finally, by abandoning the TPP the US has started to dismantle what was positive in Obama’s foreign policy legacy. This legacy included the signing of the TPP, the settlement of the Iranian nuclear issue and normalized relations with Cuba. Trump has promised to destroy all of that. In doing so, he seems to be driven not so much by dislike of the former president as a fundamental disagreement with his foreign policy strategy and the philosophy behind it.
Obama’s strategy consisted of an attempt to revive and strengthen US leadership by creating US-leaning economic communities with the potential of drawing non-western powers into their orbit. These efforts relied on consolidating European and Asian allies, bolstering the political authority and appeal of the US in Latin America, affirming Washington’s leadership in resolving conflicts in the Middle East and, finally, by showing a commitment to combat global threats and resolve the key global issues such as terrorism and the spread of WMDs. This was the concept behind the TPP and TTIP, efforts to strengthen NATO and Asian alliances, restore relations with Cuba and sign the Iran nuclear deal.
On the other hand, it is clear that Trump lacks any kind of foreign policy strategy. For him, the objective of strengthening the global leadership of the US just for the sake of being a leader and maintaining a US-centered world order is something alien. He refutes the core idea that dominated liberal thought over the last 70 years in the US whereby US security, prosperity and power are inseparable from its global leadership and the need to shape the whole world according to its values and vision. For Trump, these two elements are to a large extent contradictory, and he chooses to have the US by itself.
By taking the decision to abandon the TPP on the third day of this presidency, Trump demonstrated the shift to a self-centered great-power foreign policy that is incompatible with US global leadership as it was understood during the Cold War, which marks the end of this type of leadership and of a whole era.