In the beginning of his first week in office, President Donald Trump has moved to pull the United States out of the proposed Trans-Pacific Partnership ("TPP") trade pact, fulfilling a campaign promise, as he repeatedly called the TPP a "horrible deal" while campaigning for president. “Great thing for the American worker that we just did,” Trump said as he signed a notice in the Oval Office.
The TPP – which was signed onto by the twelve countries that border the Pacific Ocean in February 2016 – aimed to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth. Members - which include Japan (the only country to have already ratified the pact), Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru - had also hoped to foster a closer relationship on economic policies and regulation.
The agreement was designed so that it could eventually create a new single market, something like that of the EU, but in order for it to come into effect, all 12 nations needed to ratify the pact, making U.S. participation notably significant. While it may be possible for the other countries to forge a smaller scale pact in its place, the pact in its current form cannot be ratified.
Instead, of joining the TPP, Trump said he - or better yet, Commerce Secretary nominee Wilbur Ross, U.S. Trade Representative Robert Lighthizer and the head of the newly-formed White House Trade Council, Peter Navarro - will move to begin broker individual trade deals for the U.S. with the countries in the TPP.
This marks a swift move from recent trade protocol. As noted by the BBC, "Former President Barack Obama treated trade deals as a priority during his tenure, and this particular deal would have bolstered America's position in the Asia-Pacific region, where China is growing in influence. But US opponents have characterized the TPP as a secretive deal that favored big business and other countries at the expense of American jobs and national sovereignty."
A number of footwear and apparel brand and organizations — including the Footwear Distributors & Retailers of America and the American Apparel & Footwear Association — as well as brands, such as Nike, New Balance (which ultimately shifted its stance to anti-TPP), Gap, and Hanes, have been vocal proponents of TPP. These parties have cited the TPP's promise to eliminate more than 18,000 taxes and other trade barriers, strengthen ties among member countries and increase economic growth.
Speaking about the TPP in November, Matt Priest, president of the Footwear Distributors & Retailers of America, said: “For us, the TPP was all about the inclusion of Vietnam — that’s where a lot of shoes are made and that’s where we have a strong strategic interest as an industry. If he were to scrap the TPP but announce the negotiation of a bilateral agreement with the Vietnamese government, then we would be extremely supportive — and we would be at the negotiation table.”
Julia K. Hughes, President of the United States Fashion Industry Association, echoed this notion, saying: "Free trade agreements are important to our sector.” And for the Hanes and Gaps of the world, that is certainly true; those companies' profits have soared as they have been able to tap into new markets while making ever-cheaper clothes.
However, there were, of course, opponents, including the non-partisan Congressional Research Service, which warned last year that the TPP could increase competition for Western manufactures and reduce demand for U.S. textile exports because Asian apparel producers could export clothing to the United States duty-free.
Others indicated that for U.S. apparel workers, the era of free trade has been devastating. Since the North American Free Trade Agreement ("NAFTA") went into effect in 1994 and the Central America Free Trade Agreement ("CAFTA") followed in 2006, the effect on employment has been significant. Employment fell by 80 percent from 1990 to 2010, according to the U.S. Labor Department.
Many of the remaining manufacturers are located in Los Angeles, where from 2002 to 2012, almost 60 percent of garment manufacturing jobs disappeared, according to the Los Angeles County Economic Development Corporation.
And speaking of NAFTA, President Donald Trump is expected to sign an executive order as early as Monday stating his intention to renegotiate the free trade agreement between the United States, Canada and Mexico, a White House official told NBC News.
Eliminating NAFTA, which was crafted by former President Bill Clinton and enacted in 1994, was a frequent Trump campaign promise. The deal was intended to eliminate most trade tariffs between the three nations, increase investment and tighten protection and enforcement of intellectual property.
"We will be starting negotiations having to do with NAFTA," Trump said Sunday at a swearing-in ceremony for his top White House advisers. "We are going to start renegotiating on NAFTA, on immigration and on security at the border."