Trump kills Australian trade deal with stroke of pen
US PRESIDENT Donald Trump has killed America's involvement in the Trans-Pacific Partnership mega free trade deal with Australia, New Zealand, Japan and eight other Pacific nations.
Trump signed an executive order on Monday to withdraw the US from the TPP.
"Everyone knows what that means, right?" Trump said at the signing ceremony in the White House. "We've been talking about this for a long time. It's a great thing for the American worker."
However it is a major blow to the Australian government, with Prime Minister Malcolm Turnbull holding out hope Trump might not go ahead with his TPP election promise.
Australian Trade Minster Steven Ciobo, who is in the US, said on the weekend he has been speaking with remaining TPP nations "on ways to lock in the benefits from the TPP" without US involvement.
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Donald Trump signs executive orders at the White House, flanked by his advisers. Picture: AP Photo/Evan Vucci
Withdrawing from the TPP is one of Trump's first major moves since being sworn in as president on Friday.
The TPP was negotiated under former President Barack Obama, but never ratified by Congress.
Trump said on Monday he is pursuing what he calls "fair trade", not free trade, and he has China and Japan in his sights. He called out Japan for making "it impossible to sell" US cars in Japan.
"If you want to sell something into China and other countries it's very, very hard," Trump told a meeting of chief executives of some of America's biggest companies earlier on Monday.
"In some cases it's impossible.
"They won't even take your product. But when they do take your product they charge you a lot of tax. I don't call that free trade. What we want is fair trade."
In the meeting with company heads, including Australian Dow Chemical chief executive Andrew Liveris who was appointed as one of Trump's key advisers, the president laid out his plans to cut regulations for businesses in the US and slash the company tax rate from 35 per cent "down to anywhere from 15 to 20 per cent".
"What we want to do is bring manufacturing back to our country," he told Liveris and the chief executives of other companies including Ford, US Steel and Lockheed Martin, said.
He said companies that moved factories out of the US and then tried to sell its products back to America would be punished with a "very major border tax".
On Monday morning, Trump told business leaders at a White House meeting that he's going to be cutting regulations "massively" - by 75 per cent and "maybe more."
"We are going to be cutting taxes massively for both the middle class and for companies. And that's massively. We're trying to get it down to anywhere from 15 to 20 per cent," Trump said.
"A bigger thing, and that surprised me, is the fact that we are going to be cutting regulation massively. Now we are going to have regulation and it will be just as strong and just as good and just as protective of the people as the regulation we have right now. The problem with the regulation you have right now is that you can't do anything," he added.
Trump boldly claimed, "We think we can cut regulations by 75 per cent. Maybe more."
At that point, he reached over to shake the hand of Michael Dell of Dell Technologies.
"Or when Dell wants to come in and do something monstrous and special, you are going to have your approvals really fast," Trump said.
A historic 12-nation trade deal could still be salvaged without the US, Trade Minister Steve Ciobo believes.
"There's quite a lot of countries that have an interest in looking to see if we could make a TPP 12 minus one work," Mr Ciobo told ABC radio on Tuesday.
The minister conceded the original deal can't go forward unless the US changes its mind.
But he has already had discussions with Canada, Mexico, Japan, New Zealand, Singapore and Malaysia about working towards an alternative.
"It's a moving space, but it's an important space, one that we must continue to pursue to give Aussie exporters the best chance to get preferential, global access for Australian exports," he said.
Mr Ciobo had meetings with counterparts during the World Economic Forum in Davos last week.
"This is very much a live option and we're pursuing it and it will be the focus of conversations for some time to come," he said.
The Australian government would keep alive the option of ratifying the TPP even without the US.
"We're not going to be like Bill Shorten and the Labor Party and walk away from this deal because it requires now a little bit of elbow grease," Mr Ciobo said.
He would not be drawn on what this would mean for Australia's economic relationship with the US.
Opposition trade spokesman Jason Clare said Malcolm Turnbull's credibility was in little better shape than the "dead" TPP, with the Prime Minister declaring the deal was pivotal to his economic plan.
"It's over. Donald Trump has killed the TPP," Mr Clare said in a statement. "It's time for Malcolm Turnbull to wake up and move on, and develop a real economic plan for Australia."
The Prime Minister discussed the trade deal with his Japanese counterpart Shinzo Abe on Monday night.
Mr Turnbull noted Japan's ratification of the TPP - the only country so far to do so - and underlined his desire to consider options to progress the agreement, his office said.
Both leaders agreed the deal was in the interests of both the Australian and Japanese people.
Aside from the TPP, Australia is currently part of negotiations for a Regional Comprehensive Economic Partnership in the Asia Pacific region.
The RCEP could see a free trade deal between countries including Australia, China, India, Japan, the Republic of Korea and New Zealand.
WHAT IS THE TPP?
* The Trans-Pacific Partnership was the world's largest regional trade agreement, involving 12 nations and covering about 40 per cent of the global economy.
* Australia joined the negotiations in late 2008 and Trade Minister Andrew Robb was lead negotiator.
* The TPP was hoped to eliminate more than 98 per cent of tariffs in the region, removing import taxes on about $9 billion of Australian trade. * Beyond market access, the TPP was to create a single set of trade and investment rules between its members countries making it easier and simpler for Australian companies to trade in the region.
WHAT COUNTRIES WERE INVOLVED?
* Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam.
* Last year, one third of Australia's total goods and services exports - worth $109 billion - was sent to TPP countries.
WHAT WAS THE DEAL TO COVER?
* Exports, including beef, dairy, grains, sugar, horticulture, seafood, wine, resources and energy, and manufactured and other goods.
* It also addressed modern trade and investment issues such as competition, e-commerce, anti-corruption and levelling the playing field between private business and state-owned enterprises.
* The TPP will not have required any changes to Australia's intellectual property laws or policies, whether in copyright, pharmaceutical patents or enforcement.
* Australia's five years of data protection for biologic medicines (made from genetically-engineered proteins derived from human genes) was to remain unchanged.
* New US President Donald Trump signed an executive order withdrawing the US from the TPP just three days after its champion, Barack Obama left the White House.
* Other presidential hopeful Hillary Clinton had also pledged to do the same if she was elected.
* Prime Minister Malcolm Turnbull and his Japanese counterpart, Shinzo Abe, had last week discussed the possibility of other member countries quickly ratifying the deal to pressure the US to stay on board.
(Source: Department of Foreign Affairs and Trade)