Trump Declares New World-Trade Order

President Donald Trump speaks at the Asia-Pacific Economic Cooperation CEO Summit in Da Nang on Friday. In his speech, he said the current U.S. trade Imbalance isn’t acceptable. Image: Mark Schiefelbein/Associated Press

President disavows multilateral trade agreements that ‘tie our hands’ at Asia summit

Jake Maxwell Watts, Chuin-Wei Yap and Natasha Khan
The Wall Street Journal

DA NANG, Vietnam—President Donald Trump delivered a full-throated defense of economic nationalism here Friday, telling a Pacific Rim summit that the U.S. wouldn’t enter into multilateral trade deals, in a message that differed sharply from the one China laid out at the same forum.

The leaders of the world’s two largest economies presented alternative visions of the future of global commerce, with Chinese President Xi Jinping espousing multilateralism and globalization and Mr. Trump calling current trade rules unfair.

“We are not going to let the United States be taken advantage of any more,” Mr. Trump told business leaders at the Asia-Pacific Economic Cooperation forum. The U.S. had opened its markets to the world, he said, but in return, others countries’ “cheating” had disadvantaged American companies and workers.

“I will make bilateral trade agreements with any Indo-Pacific nation that wants to be our partner and will abide by the principles of fair and reciprocal trade. What we will no longer do is enter into large agreements that will tie our hands, surrender our sovereignty and make meaningful enforcement practically impossible,” Mr. Trump said.

The Obama administration had sought to bind the region’s economies with America’s through the Trans-Pacific Partnership, a 12-nation pact that excluded China. Mr. Trump withdrew Washington from the agreement after he took office; the remaining 11 nations are discussing how to revive it.

Moments after Mr. Trump’s address, President Xi of China called for a more inclusive world economy that was ready for technological change, and brandished Beijing’s claim to being the guardian of free trade.

“We are seeing profound changes in economic globalization,” said Mr. Xi, in his first address to a major multinational forum since consolidating executive power last month. “We should uphold multilateralism, pursue shared growth through consultations and forge closer partnerships.”

Their contrasting rhetoric underscores a role reversal for the two economic giants: China remains a relatively closed and state-dominated economy, while the U.S. helped write the current rules on trade and until recently was a longtime advocate for liberalization.

Mr. Trump’s speech jolted long-time Asia hands in Washington, who said the tone marked a sharp shift from three decades of American strategy aimed at using the economic forum as a way to nudge forward more regional integration.

“What the president said in Da Nang is a serious blow to the strategy that multiple presidents have been pursuing over the last 30 years of advancing Asia-Pacific integration,” said Matthew Goodman, who handled U.S. coordination with APEC in both the George W. Bush and Obama administrations.

“We helped form APEC in 1989 to create trade liberalization in an Asian way—nonbinding, and consensual,” said Mr. Goodman, now a senior adviser for Asian economics at the Center for Strategic and International Studies think tank in Washington.

The two presidents’ tone also broke with the more agreeable tenor on display a day earlier. Messrs. Trump and Xi arrived in Vietnam just hours after the U.S. president concluded a two-day state visit to Beijing. There, Mr. Trump was chummy with his Chinese counterpart, hailing their “very good chemistry” and calling Mr. Xi a “very special man.” Mr. Trump said he had spoken openly with Mr. Xi about Beijing’s trade practices and the U.S. trade deficit with China.

The APEC bloc comprises nations that account for about half of global trade, including China and Japan, and acts as a forum for economic discussions. It also provides a venue where executives of global companies can rub shoulders with world leaders.

Mr. Trump’s views on trade have pitted the U.S. trade delegation here against the other members, echoing previous disagreements with world leaders at the Group of Seven major economies and Group of 20 developing and industrialized nations.

Along with pulling out of the Trans-Pacific Partnership, Mr. Trump has initiated talks to renegotiate the North American Free Trade Agreement, and has threatened to withdraw from or renegotiate a similar deal with South Korea.

On Friday, Mr. Trump said the U.S. had previously opened its markets but had suffered as other countries had failed to reciprocate, stole intellectual property and unfairly supported their state enterprises.

“They engaged in product dumping, subsidized goods, currency manipulation and predatory industrial policies,” he said.

Following Mr. Trump’s speech, his U.S. trade representative, Robert Lighthizer, issued a statement saying he was ready to execute the pivot in American trade strategy articulated by Mr. Trump, one focused more on using the clout of access to the U.S. market to wrest concessions from Asian countries, rather than U.S. leadership and example to foster greater market liberalization.

“The president spoke loud and clear: The era of trade compromised by massive state intervention, subsidies, closed markets and mercantilism is ending,” Mr. Lighthizer said. “The United States will no longer allow these actions to continue, and we are willing to use our economic leverage to pursue truly fair and balanced trade.”

The president has frequently accused China of such actions, though he didn’t name Beijing when outlining these alleged transgressions on Friday.

Mr. Trump’s transactional approach to trade could spook America’s trading partners, warned James W. Fatheree, acting vice president for Asia of the International Affairs Division of the U.S. Chamber of Commerce. “While he did say something today about seeking mutually beneficial agreements, until they can convince partners and illustrate and demonstrate there is a win-win, there won’t be a long line of countries lining up for bilaterals.”

On the sidelines of the APEC meeting, the 11 countries remaining in the TPP continued to deliberate on a way to move forward without the U.S., in the hope that it could be structured in a way that would allow Washington to join in the future, said people familiar with the talks. The negotiations hadn’t concluded late Friday.

Mr. Trump is scheduled to meet with the other APEC heads of government in a closed-door retreat in Da Nang on Saturday, before he flies to Hanoi for a meeting with Vietnamese President Tran Dai Quang. He then travels to the Philippines for a meeting with President Rodrigo Duterte and a summit with Southeast Asian leaders over the weekend.

Jacob M. Schlesinger in Washington contributed to this article.

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