Throughout his presidential campaign, Donald Trump made his position on trade crystal clear – one he reiterated in a November 22 video laying out his plans for the first 100 days: “I’m going to issue a notification of intent to withdraw from the Trans Pacific Partnership, a potential disaster for our country.”
That promise followed up demands that China be declared a currency manipulator, NAFTA be renegotiated, and American companies that send production off-shore be subject to punitive duties.
While Trump’s mercantilism is widely known, the positive part of his agenda – spare though it may be – has received far less attention. Immediately after reiterating his plans to withdraw from the TPP, for example, he said that in place of such mega-regional deals “we will negotiate fair, bilateral trade deals that bring jobs and industry back onto American shores”.
This declaration leaves us with more questions than answers. It is not clear whether by “trade deals” he means what we typically imagine – comprehensive free trade agreements (FTAs) with one or more partners – or if he instead envisions a series of one-off transactions such as those he has foisted upon Carrier, Ford, and other corporations.
And even if he does intend to move his sights from companies to countries, we cannot be certain that any Trump FTAs would resemble the agreements that the United States has been negotiating since 1984, or even meet the legal requirements of the World Trade Organisation.
But let us assume that a man who sees himself as the ultimate deal-maker does want not only to tear down existing agreements, but to negotiate new ones of his own making. What sort of deals would he strike? Donald Trump might prove to be more favourable to free trade than many imagine – but may also take it to some surprising places.
There is good reason to expect a viscerally mercantilist administration to prefer agreements with larger countries, which offer better prospects of promoting exports and jobs and less risk of American wages being undercut. He could find those partners by picking through the wreckage of the TPP, and probably also the Transatlantic Trade and Investment Partnership with the European Union.
Trump may find a bilateral agreement with the United Kingdom especially appealing. This would cement his ties with the Brexiteers while also securing access to the world’s fifth largest import market. It may take some time to gin up these negotiations, however, as London must complete its divorce from Brussels before it can tie the knot with Washington.
So where else could he turn? Japan has a similarly large market, and the Trump administration may hear any overtures from Tokyo with a sympathetic ear. As for the other 10 signatories to the TPP, the United States already has FTAs in place with six of them. Malaysia and Vietnam might be just large enough to merit attention, but any arguments in favour of Brunei and New Zealand would need to rest on some criterion other than size.
Other leading economies can be struck from the list. Most of them either already have agreements with the United States, or are European Union members and hence are barred from making bilateral deals. We can also put aside China (for obvious reasons) and Hong Kong (whose market is already wide open).
By normal logic, that leaves Switzerland as practically the only big-market country left that would be considered a good prospect for negotiations.
Yet if there is one thing we have learned to expect from Trump, it is that he will do the unexpected. What if he decides to toss that normal logic into the same bin to which he has consigned so many other norms and traditions? He might revel in another opportunity to flout convention by turning to his far-flung web of business interests and network of idiosyncratic cronies. It is hardly far-fetched to expect that his choice of negotiating partners may be influenced by the impact that an agreement might have on his business empire.
In particular, there are five seemingly unlikely trade partners – what I call, mnemonically if not euphoniously, Trump’s TRIMPS – where the incentives behind a trade deal are not just commercial and political but also personal.
T is for Taiwan. Trump might see striking a trade agreement with this renegade province and darling of the American right as another chance to stick his thumb in China’s eye. It is also a large import market, and Trump’s business associates have recently been exploring opportunities in Taipei. Also, some of his political operatives have ties to the island that date back decades.
R is for Russia. Negotiating a trade agreement with Moscow would admittedly be a very heavy lift, especially when Congress feels compelled to act as a watchful chaperone when it comes to the Putin-Trump bromance. The as-yet unknown extent of Trump’s business ties to Russia may also propel him (while providing lawmakers still more cause for concern). Proposing such talks would nonetheless be precisely the sort of shock in which Trump seems to delight – the economic complement to the broader political rapprochement that he plans to pursue.
I is for India. New Delhi has no aversion to market intervention and managed trade, and thus may be a willing partner if Trump wants to inaugurate a wholly new template for US trade agreements – perhaps even one that violates WTO rules. Trump also has substantial business interests in India, and vigorously courted the votes and campaign contributions of Indian-Americans.
M is for the MERCOSUR countries of Argentina, Brazil, Paraguay, and Uruguay. This would be a surprising choice, both because of the group’s established disinterest in extra-regional negotiations and its internal disputes. Yet even if its members are barely on speaking terms, they do form a large, emerging market. Moreover, Trump has businesses in all but Paraguay. If the group were not interested, Uruguay might be an attractive stand-alone partner whose smallness is offset by its Trump investments.
P is for the Philippines. Whether one chooses to see President Rodrigo Duterte as the Filipino Trump or Trump as the American Duterte, the resemblance is as clear as the mutual admiration. The country’s import market is modest, but it does host Trump businesses and has a sizeable diaspora in the United States. Duterte also seems eager to consummate the relationship, having appointed the real estate magnate José EB Antonio – the man who happens to be building Trump Tower Manila – as his trade envoy to the United States.
A deal with any of the TRIMPs may seem unlikely. A few of them might belong in a basket of international deplorables, and negotiations with at least one of them may seem unimaginable.
But if we have learned anything from the recent presidential campaign, it is to redefine the imaginable.
