Saturday, July 8, 2017

Trump on the fringe: 25% of the world economy covered by the EU-Japan trade agreement - without the US

The New York Times reports on The E.U.-Japan Trade Deal: What’s in It and Why It Matters. On trade the U. S. is increasingly isolated from the global community. That’s true of other issues like climate change as the NY Times reported in Once Dominant, the United States Finds Itself Isolated at G–20. Following snippets from both Times’ reports tell the story.

The short story

… the deal is the biggest bilateral trade agreement ever struck by the European Union, covering about a quarter of the global economy.

Together, the European Union and Japan would constitute a trading bloc of a size to rival that created by the North American Free Trade Agreement, presently the world’s biggest free trade zone (and one that Mr. Trump wants to renegotiate).

The longer story

BRUSSELS — The European Union and Japan announced a broad agreement on Thursday that would lower barriers on virtually all the goods traded between them, a pointed challenge to President Trump on the eve of a summit meeting of world leaders in Germany.

See trailing photo below.

Though the deal still needs further negotiation and approval before it can take effect, it represents an act of geopolitical theater, a day before a Group of 20 summit meeting begins in Hamburg. At a meeting of G–20 finance ministers in March, Steven Mnuchin, the United States Treasury secretary, pointedly declined to endorse a statement in favor of free trade.

“Although some are saying that the time of isolationism and disintegration is coming again, we are demonstrating that this is not the case,” Donald Tusk, the president of the European Council, said at a news conference in Brussels. “The world really doesn’t need to go a hundred years back in time. Quite the opposite.”

Prime Minister Shinzo Abe of Japan said the deal signified the creation of “the world’s largest free, advanced, industrialized economic zone.”

More Japanese cars are headed to Europe and more European foodstuffs are headed for Japan.

Tokyo is also likely to make it easier for European companies to bid for major government contracts, a move that could benefit train makers like Siemens of Germany and Alstom of France.

Accompanying the trade deal is a separate partnership agreement in which both sides pledge greater cooperation on issues like cybercrime and climate protection.

Negotiations have been proceeding for years, but were accelerated after Mr. Trump abandoned the Trans-Pacific Partnership, a wide-ranging trade agreement with Pacific Rim countries that had Japan at its core.

The new deal was a clear sign that other parts of the world will continue to pursue a liberalizing trade agenda, even without the United States.

Trump deepens divide between American and the rest of the world

He seems to relish making America a has-been. Under Trump it seems we’ve moved from a “dominant force” that once “set the agenda” to a country that now “stands alone.”

For years the United States was the dominant force and set the agenda at the annual gathering of the leaders of the world’s largest economies.

But on Friday, when President Trump met with 19 other leaders at the Group of 20 conference, he found the United States isolated on everything from trade to climate change, and faced with the prospect of the group’s issuing a statement on Saturday that lays bare how the United States stands alone.

Chancellor Angela Merkel of Germany, the host of the meeting, opened it by acknowledging the differences between the United States and the rest of the countries. While “compromise can only be found if we accommodate each other’s views,” she said, “we can also say, we differ.”

Ms. Merkel also pointed out that most of the countries supported the Paris accord on climate change, while Mr. Trump has abandoned it. “It will be very interesting to see how we formulate the communiqué tomorrow and make clear that, of course, there are different opinions in this area because the United States of America regrettably” wants to withdraw from the pact, she said.

On climate, too, the United States — just a year ago a leading voice in favor of global action to reduce carbon emissions — is on its own path.

Negotiators haggled late into Friday night over language declaring that 19 of the G–20 members consider the Paris accord “irreversible,” an effort to cast the United States as an outlier for jettisoning the pact while glossing over friction about the decision.

But American officials were pressing language saying the United States would work with other nations to help them gain access to and use fossil fuels “more cleanly and efficiently.” This suggestion met with stiff resistance from President Emmanuel Macron of France.

And what do we get out of Trump’s deliberate isolationism? Not much, but Russia gets Trump’s positive regard.

Mr. Trump seemed to relish his isolation. For him, the critical moment of Friday was his long meeting with the Russian president, Vladimir V. Putin, which seemed to mark the reset in relations that Mr. Trump has been desiring for some time. It also provided Mr. Putin the respect and importance he has long demanded as a global partner to Washington.

It does get worse.

Within days, [Trump] could impose restrictions and new tariffs on steel imports. Doing so would be a provocative move that could affect trade with more than a dozen major countries even while lifting the spirits of his most ardent supporters.

The tariffs could very well provoke a global trade war.

[And] Mr. Trump has even contemplated pulling the United States out of the World Trade Organization itself.

But as Mr. Trump contemplates protectionism, Europe and Japan reached a landmark free trade agreement this week. Mexico and China, two of the United States’ largest trading partners, have been mulling their own deal. The world is moving ahead regardless.

This photo of the G20 participants is symbolic of how Donald Trump is diminishing the global role played by the U. S. Observe Trump on the fringe.

EU-Japan trade deal
U. S. side-lined in EU-Japan trade deal

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