President Donald Trump's move to exit the 12-nation Trans-Pacific Partnership opens the door for China to "step into the void" left by the United States in Asia, said Bill Daley, who was as Commerce secretary in Bill Clinton's administration.
"That's the future growth of the world right now," Daley added. "We can't give the impression to our allies or friends in Asia that because the president is against TPP ... that therefore economically we're going to pull away from Asia."
"That's a terrible message," argued Daley, currently head of U.S. operations at Swiss hedge fund Argentiere Capital.
China was never part of TPP. In addition to the United States, the signatories were Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.
The agreement, sealed by the Obama administration but never ratified by Congress, had aimed to open up key markets, including those in the Asia-Pacific region.
According to a statement from the White House after Monday's executive order, "The Trump administration will pursue bilateral free trade opportunities with allies around the world, wherever possible."
On Sunday, the president said he intends to renegotiate with Mexico and Canada the North American Free Trade Agreement, passed during the Clinton administration 23 years ago.
Daley, who helped Clinton with NAFTA, told CNBC on Wednesday the agreement could surely be updated, but should not be thrown out all together.
Later Wednesday on "Squawk Box," Peter Navarro, tapped by Trump to lead the newly created National Trade Council, said the president wants to pursue what he considers more nimble bilateral trade agreements.
"Bilaterals can occur much more quickly, because basically, it's just a few people in a room talking about what needs to be done," Navarro argued.