Davos has been depressing, a journalist friend emailed me the other day. And indeed the spectacle of the neoliberal elites congratulating themselves on still ruling the world is a downer. But my ears perked up when President Trump, speaking from Davos, suggested that he might be open to participating in the TPP (now being renamed CPTPP, Comprehensive and Progressive Agreement for Trans-Pacific Partnership).
That is (Mr. Trump explained) if a substantially better deal were to be had. It's unclear what the President means by a substantially better deal. But the US has nothing to lose in returning to the TPP/CPTPP table, and seeing whether there's a deal possible. It is often put about that Mr. Trump withdrew from TPP. In a certain technical sense that's true, and the President often took the credit for scuttling the deal. Yet the background reality is that out-going President Obama ceased efforts to push the accord through Congress once it became clear that TPP would not pass, at least not without changes such as the removal of Investor-State Dispute Settlement (ISDS).
When President Trump came into office, the existing architecture and timetable of TPP would have made it impractical for him to turn around and ask that it be renegotiated to reflect his own vision of global trade. More importantly, perhaps, at the time Mr. Trump seemed stuck in a dogmatic preference for bilateral deals based on "America First" if not outright unilateralism. But for months now he has been renegotiating NAFTA. The President holds himself out as a man who's not afraid of trying to make a deal. So then why be afraid of testing the trans-Pacific waters?
If TPP could be re-adjusted for New Zealand and Canada, then why not for the US? As a gesture to the US Administration, in light of Mr. Trump's Davos comments, the 11 TPP partners should freeze the timetable for signing to allow exploring the possibility of talks with the US. For Canada and Mexico, particularly, having the US in the deal could be a critical backstop in case the NAFTA renegotiation collapses (which remains a very real possibility).
This could also be an opportunity to remove ISDS from TPP/CPTPP. United States Trade Representative Robert Lighthizer is a sharp and persuasive critic of ISDS and in the months of public scrutiny and legislative consideration leading up to (the hoped-for) ratification of TPP/CPTPP, most of the deal's enemies are likely to focus on ISDS-the most obvious and easiest-to-explain legitimacy deficit. With the removal of ISDS from TPP/CPTPP, President Trump could plausibly claim significant change has been made. Progressive Democrats in Congress would cheer. And some of the deal's most vociferous adversaries would be routed.
