Free Trade

Trump's Trade Deal With Japan Is Good. Staying in the TPP Would Have Been Better.

Signing a trade with Japan is a small step in the right direction, but it only cancels out a portion of the damage that Donald Trump has done.

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President Donald Trump and Prime Minister Shinzo Abe of Japan have reached a deal that promises to cut tariffs and boost trade between the two nations. That's good news. But the agreement is also a disappointing reminder of a better deal that could have been.

The pact, announced Wednesday, is an undeniably positive development for American businesses and a rare pro-trade maneuver from the Trump administration. Japan agreed to reduce or eliminate tariffs on many American agricultural exports, including beef, pork, corn, and some fruit. In return, the U.S. will reduce tariffs on Japanese industrial products, bicycles, flowers, tea, and other items. The deal also bars either country from raising duties on digital products, such as streaming videos, music, and video games.

A joint statement issued by the two leaders states that the agreement is a step toward settling other tariff-related issues—a signal that Trump's threat of hitting Japanese-made cars with tariffs could be off the table now.

"This is a huge victory for America's farmers, ranchers, and growers," Trump said at a press conference announcing the deal. "And that's very important to me."

Indeed, increasing access to Japanese markets could be a $7 billion boost for American farmers—who have been hit particularly hard by Trump's trade wars, which have sharply reduced exports to China. But American farmers could already have had greater access to Japan, and to a number of other countries around the Pacific Ocean, if Trump had not yanked America out of the Trans-Pacific Partnership (TPP) shortly after taking office.

Trump's opposition to the TPP, a 13-nation trade agreement the Obama administration was trying to put together, was supposedly rooted in his belief that the bilateral trade deals he promised to negotiate would be better for Americans. But the very agricultural tariff reductions Trump is trumpeting as a victory for American farmers in his Japan deal were also part of the TPP.

In other words, if the U.S. had remained in the TPP, American farmers would already be benefitting from lower tariffs on beef and pork exported to Japan. And they would have greater access to other nations too. Trump is celebrating the benefits of a single trade pact when he could have had much more.

"It really is a pretty small-scale trade agreement," says Clark Packard, a trade policy counsel with the R Street Institute. "The TPP was a better deal than this. It encompassed a lot more areas of trade. It had more members, it was more expansive, and we wasted a lot of time and effort to get to this point."

The TPP would have eliminated 18,000 tariffs that the partner countries currently impose on American exports. It also would have included soybean exports, which are notably not part of the U.S.–Japan deal.

The TPP was not perfect. Like any trade deal, it would have set rules that favored some politically connected U.S. exporters. It was hundreds of pages long, much of which was dedicated to trying to impose American labor, environmental, and intellectual property rules on other countries. In an ideal world, politicians and bureaucrats would have no role to play in the trade between people and businesses, no matter how many national borders are crossed in the process. If Trump wanted to scrap the TPP in favor of simpler deals that merely reduced tariffs and other barriers to trade, that would have been an improvement.

Instead he has done the opposite. He has raised tariffs on many imports—which means hiking taxes on American consumers and businesses—and his decision to abandon the TPP deprived American businesses of new opportunities in Asian markets.

Signing a trade with Japan is a small step in the right direction, but it only cancels out a portion of the damage Trump has done. "It's better than the status quo," says Packard, "but not as good as it could have been."

 

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  1. “Trump’s Trade Deal With Japan Is Good. Staying in the TPP Would Have Been Better.”

    Nigga you screeched “Market Crashes” over a minor dip.

    Your speculation is worth fuck all.

    1. Unless you’re black, you should never use that racial slur. Not even the 5-letter version is acceptable.

      And as long as Orange Hitler is ruining our economy, Reason must continue detailing the damage.

        1. You arent that white.

      1. Nigger. Nigger. Nigger.
        Don’t tell me what words I may use.
        As for the damage Trump does – sometimes short-term pain is necessary for long-term gain. Trump has succeeded in 3 years beyond what Bush 1, Bush 2, Clinton and Obozo achieved in 28. I’ll give him the benefit of the doubt. He’s earned it.

        Of course, the DemonCRAPS and some “Reason” writers don’t recognize success unless it’s RIGHT NOW! RIGHT NOW! RIGHT NOW!

        1. A record of protectionism isn’t success.

  2. “Trump is celebrating the benefits of a single trade pact when he could have had much more.”

    And been restricted much more too. But sure, let’s pretend.

  3. Readership is to believe Mr. Boehm is basing his opinion on a side-by-side comparison of TPP to the Japan/US trade deal. Clearly, he has not. This article is vapid speculation.

    1. Author makes 6 cites (links) and quotes experts. But we’re supposed to take YOUR good word that “This article is vapid speculation”.

      Are you also selling prime real estate in Florida?

      1. 6 experts in economics. Man. That is insurmountable. no way could you find 6 economists arguing the other way. No sir.

        Appeal to authority with bad authorities is hilarious.

        1. Wow! Just Wow!

          Do you recall the awesome enchanter named “Tim”, in “Monty Python and the Search for the Holy Grail”? The one who could “summon fire without flint or tinder”? Well, you remind me of Tim… You are an enchanter who can summon persuasion without facts or logic!

          So I discussed your awesome talents with some dear personal friends on the Reason staff… Accordingly…

          Reason staff has asked me to convey the following message to you:

          Hi Fantastically Talented Author:

          Obviously, you are a silver-tongued orator, and you also know how to translate your spectacular talents to the written word! We at Reason have need for writers like you, who have near-magical persuasive powers, without having to write at great, tedious length, or resorting to boring facts and citations.

          At Reason, we pay above-market-band salaries to permanent staff, or above-market-band per-word-based fees to freelancers, at your choice. To both permanent staff, and to free-lancers, we provide excellent health, dental, and vision benefits. We also provide FREE unlimited access to nubile young groupies, although we do firmly stipulate that persuasion, not coercion, MUST be applied when taking advantage of said nubile young groupies.

          Please send your resume, and another sample of your writings, along with your salary or fee demands, to ReasonNeedsBrilliantlyPersuasiveWriters@Reason.com .

          Thank You! -Reason Staff

          1. You remind me of someone who eats their own shit.

        2. Most economists agree that free trade is best in the long run.

  4. Lol, now Reason is in favor of crony managed trade deals. You know, to own Trump.

    1. Owning Trump is a secondary benefit to serving their paymaster.

  5. “Signing a trade with Japan is a small step in the right direction, but it only cancels out a portion of the damage that Donald Trump has done.”

    Tell me about it. Drumpf has done so much economic damage that Charles Koch’s net worth is barely $60 billion.

    Barely. Sixty. Billion.

    A Hillary Clinton economy — with its open borders and no tariffs — would have boosted that pitiful figure to a much more respectable seventy or eighty billion. Fortunately #TrumpUkraine means Putin’s Puppet is effectively done as President. Soon we’ll have someone in the White House whose economic policies will work better for the 10 richest people on the planet. Which, fundamentally, is what Koch / Reason libertarianism is all about.

    #BillionairesKnowBest

    1. Protectionism only works for certain industries at a cost to other industries and consumer prices.

      Free trade is best in the long run. It isn’t a matter of helping out billionaires.

    2. Why do you have a problem with people accumulating wealth? Redistributing all of it, which is ridiculous, wouldn’t last us very long.

  6. The TPP was a lot more than “not perfect”. It had some truly awful provisions. We are unambiguously better off without it.

  7. Hey Eric, You’re a trade expert and write articles to convince people on important trade matters. So write an article that details the plusses and minuses and inner workings of the TPP and compare those with the Japan deal. It will be a big article, but you’re an expert and a professional writer so it’s well within your capabilities.

    To begin with, show that you’ve read them both. List the important provisions of each and discuss them in enough detail so we can understand them and prove that you know enough to opine on them.

    Otherwise, give it a rest.

    1. That’s the kind of coverage I would hope to get from a magazine titled “Reason.” There aren’t many writers or topics where that happens much anymore.

    2. +100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

      1. Exponents are taught in grade 6-8.

        10^12 x 10^-13 = ?

  8. The TPP was a terrible treaty. If it had been just tariffs and such, it would at least have lowered them. But it threw in all sorts of unrelated malarkey, especially copyright nonsense. Just like the USMCA, which would be only marginally different from NAFTA tariff-wise, but threw in a bunch of pro-union pro-AGW crap.

  9. The TPP was terrible what is this bullshit

  10. how is this idiot allowed to write on economic matters?

    1. Boehm has the most impressive bullshit CV?

  11. That wonderful TPP. The one with gun control and such.

    http://www.truthandaction.org/trans-pacific-partnership-secret-gun-control-gutting-american-sovereignty/2/

    That TPP was developed in secret then thrust upon the public is reason enough for me to wish it dead. Much like the USA PATRIOT ACT with its 300 pages created in just 6 weeks then voted on before anyone had a chance to read it, any bill that burst onto the scene fully formed for an up-down vote should be voted down and burned.

    1. #LibertariansForGlobalGunControl

  12. Hahahahaha, that is some epic Trolling Eric.

    I mean, it has to be trolling to say that the TPP was anything other than crony capitalism.

    1. +100

  13. Bilateral agreements maximize the bargaining power of the US relative to our trade partners.

    #AmericaFirst

  14. This is “Reason”:”Government managed trade deals that are one sided against the USA are good, its free trade, don’t question it.”
    Again “Reason” FUCK YOU. I am almost about to unsubscribe from your email newsletter and have nothing to do with you but your leftard “libertarianism” is highly entertaining to me.

    1. Awww, poor baby! I know, facts and logic can be traumatic! Retreat to your safe space! Maybe they will have an orange-haired POTUS in your safe space, and it will snuggle your wuggle, and soothe and comfort you…

      1. Have you tried being dead? You should.

      2. I love how progs scream “facts and logic” as if they are things to be claimed rather than demonstrated

  15. There isn’t anything remotely libertarian about TPP.

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