Departing U.S. trade chief warns against withdrawing from TPP

WASHINGTON (Reuters) - President Barack Obama’s departing chief trade negotiator warned the Trump administration on Tuesday that it risked abdicating U.S. leadership in Asia by scrapping Obama’s 12-country Pacific Rim free trade deal.

U.S. President Barack Obama and U.S. Trade Representative Michael Froman (R) speak during a meeting of Trans-Pacific Partnership (TPP) leaders at the APEC Summit in this November 19, 2016 file photo. REUTERS/Kevin Lamarque

Michael Froman, in excerpts of his final speech as U.S. Trade Representative, said he agreed with Trump’s plan to take a tough stance on trade with China, adding that the Obama administration has filed 15 challenges to that country’s practices at the World Trade Organization over eight years.

But he said withdrawing from the Trans-Pacific Partnership trade agreement would create a vacuum that China would fill as it draws countries into its own free trade deal.

“There simply is no way to reconcile a get-tough-on-China policy with withdrawing from TPP,” Froman in remarks to the Washington International Trade Association. “That would be the biggest gift any U.S. president could give China, one with broad and deep consequences, economic and strategic.”

The U.S. Congress has not approved the TPP, which the United States, Japan, Canada, Mexico and eight other countries agreed upon in October 2015.

President-elect Donald Trump has pledged to issue a formal notice of withdrawal from TPP on Jan. 20, his first day in office. He frequently criticized the trade deal during his campaign, calling it a “rape of our country.”

Froman said withdrawing would “abdicate” U.S. leadership in the Asia-Pacific region and effectively push traditional U.S. allies in the region “into China’s arms.”

China is negotiating a 16-country trade bloc that he said would set lower standards for labor, the environment, intellectual property rights, internet freedom and other key areas.

“It would be a strategic miscalculation of enormous proportions,” said Froman, who spent all eight years of the Obama administration, both as a White House deputy national security adviser and as USTR, working to promote and negotiate the TPP deal.

“Why would we cede our role as a Pacific power?” he said. “Does anyone really think U.S. interests are better served if China, rather than the U.S., writes the rules of the road?”

Without the TPP, he said, new export opportunities would be lost and current export market share would be eroded.

Froman’s successor will be Robert Lighthizer, a veteran Washington trade lawyer who has taken a more protectionist route, working through the Commerce Department to erect tariffs to benefit the U.S. steel industry and other manufacturers.

Lighthizer was deputy USTR in the Reagan administration at a time when the United States took a tougher stance against a flood of imports from Japan.

Reporting by David Lawder; Editing by Lisa Von Ahn