By Ed Zwirn
Just-Style.com, Nov. 10, 2016
International trade deals, particularly the Trans-Pacific Partnership (TPP), may fall by the wayside following the surprise victory of Republican Donald Trump for the U.S. presidency, participants at the 28th Apparel Importers Trade & Transportation Conference warned yesterday (9 November).
A realignment of power within the Republican majorities within the Senate and the House of Representatives may have a similar affect, they added at the United States Fashion Industry Association (USFIA) organised event in New York City.
“A lot of folks were surprised by the outcome,” Julia Hughes, president of the USFIA told a panel discussion the morning after the US election. “We can see we have our work cut out for us,” she added. “We’re going to be dealing with a lot of unknowns even with the continuation of a Republican Congress.”
One of these unknowns will prove to be the increasingly doubtful fate of the TPP agreement, which has been pointedly rejected by Trump but embraced by Barack Obama, the current occupant of the White House.
“TPP is not going to happen in a Trump administration,” said David Spooner, partner at law firm Barnes & Thornburg LLP and former chief textile and apparel negotiator at the Office of US Trade Representative (USTR).
Despite Obama’s declared intention to push for TPP approval during the so-called “lame duck” session of Congress, which could run into 2017 before the inauguration of a new president on 20 January, Spooner said: “Obama is pushing hard for lame duck action, but I’m sceptical that the window will open. The gist of it is that the votes aren’t there.”
Further along the trade deal pipeline, Spooner is also less than optimistic about prospects for the proposed Transatlantic Trade & Investment Partnership (TTIP), which is intended to open up commerce between the US and the European Union.
Even before the election of Trump, “these trade negotiations are not going well,” he said on the panel. “The rounds have not been very productive.”
Looking at trade in general, Spooner sees particular challenges ahead for the apparel industry as a new president with protectionist views takes over in January. He said Trump’s top economic advisors are people that “really believe in protectionism, while the second tier [of the Trump economic team] is not as protectionist.”
“Frankly I think that means we have to be more active and proactive in [Washington] DC, because there is going to be a trade policy of some kind in the Trump administration,” he said.
Looking at the upcoming Trump administration, Jon Fee, of another law firm Alston & Bird, predicted a purge to come involving trade related personnel. “The US Trade Representative staff I assume will be purged and replaced by people who can make great deals.”
In addition, despite election results that continue Republican control of both the House and the Senate, Spooner pointed to rumours that Paul Ryan, the Republican congressman who serves as speaker of the US House of Representatives, may step down soon. Ryan, he said “can remain Speaker if he wants to but there’s a rumour going on that he won’t.” He has been generally supportive of the TPP process, but is not close to Trump.
According to a rumour cited by Spooner, Ryan may change places with Rep Kevin Brady, the Texas Republican who currently chairs the influential House Ways and Means Committee, through which all trade deals must pass if they are to gain approval. That said, Brady has also backed international trade deals in the past.
The comments chime with views published on just-style yesterday that US president-elect Donald Trump will will stay true to his word to impose restrictions or higher tariffs on imports – leading to massive long-term uncertainty for the apparel industry.