“We encourage you to work aggressively to secure reforms that would allow the United States to join the agreement,” the senators wrote. “Increased economic engagement with the 11 nations currently in TPP has the potential to substantially improve the competitiveness of U.S. businesses, support millions of U.S. jobs, increase U.S. exports, increase wages, fully unleash America's energy potential, and benefit consumers.”
There is a sharp divide between congressional Republicans and the Trump administration on how to handle trade. Trump blasted America's trade deals during his campaign and vowed he would either renegotiate many deals or scrap them, but many senators believe harsh action on trade would backfire, causing the loss of U.S. jobs and businesses.
The GOP letter was sent on the same day that Commerce Secretary Wilbur Ross released a report recommending that the president heavily restrict steel and aluminum imports with a large tariff or quota. Ross said the high levels of steel and aluminum imports “impair the national security” and need to be reduced. Trump has until mid-April to decide what to do about steel and aluminum, a separate issue from the TPP, but many of the nations involved in the TPP would be affected by U.S. tariffs on steel.
Despite Trump's fierce opposition to the TPP, Republican senators saw an opening after the president's comments at the World Economic Forum in Davos, Switzerland, in late January when Trump surprised many by saying he would be open to trade deals with multiple countries. He even mentioned the TPP specifically.
“I would do TPP if we were able to make a substantially better deal,” Trump told CNBC in Davos. “The deal was terrible, the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP.”
Up until then, Trump had said he only wanted to do unilateral deals between the United States and one other country.
Ripping up the TPP was a key talking point of Trump's campaign. He portrayed it as a deal that President Barack Obama and Democratic candidate Hillary Clinton concocted. It would lower tariffs — better known as taxes — on goods traded between the United States and 11 other countries in the Pacific Rim (Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Malaysia, Singapore, Vietnam and Brunei).
Supporters of free trade, including many Republicans, worried that Trump had made a mistake. They feared the United States was giving up its leadership role and ceding even more power to China. China was excluded from the TPP in an attempt to counter the communist country's growing influence on the global economy.
After the United States pulled out of TPP in January 2017, Canada took over the leadership role. Canadian Prime Minister Justin Trudeau used his own speech in Davos to announce the other 11 nations had reached an agreement without the United States.
The Republican senators tried to make an economic case for the TPP, saying that it would build on Trump's pro-growth agenda.
“An improved TPP would therefore bolster and sustain the economic growth America has experienced over the past year facilitated by the regulatory reductions and reforms enacted by your Administration and the substantial tax cuts you signed into law,” the letter says.
Many of the GOP senators who signed the letter are from states with a lot of agriculture, including Joni Ernst of Iowa, John Barrasso of Wyoming and Ben Sasse of Nebraska.
“Farm states were a lot of the big losers from the United States not going ahead with TPP,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “TPP would have lowered agriculture tariffs in a couple of countries where they had been high.”
Perhaps the best example is that Japan was willing to lower its tariffs on U.S. beef, opening a potentially lucrative market for American farmers. But now that the TPP is moving forward without the United States, Australian and New Zealand farmers probably will be the biggest beneficiaries.
Republicans had a chance to pass the TPP at the end of Obama's term, but Senate GOP leader Mitch McConnell (R-Ky.) said he wanted to wait until after the election.