US Trade Representative thrown into the deep end as TPP 11 seek clarity on pact's future

Key Points
  • At the APEC meeting in Vietnam, newly confirmed U.S. Trade Representative Robert Lighthizer remained tight-lipped on the future of NAFTA and TPP.
  • One key theme at the APEC trade ministers meeting was that the region was looking for a little clarity from the U.S.on its trade policies.
U.S. Trade Representative Robert Lighthizer (R) and Japan's Trade Minister Hiroshige Seko pose for a photo during the APEC Ministers Responsible For Trade (APEC MRT 23) meeting in Hanoi, Vietnam May 20, 2017.
Nguyen Huy Kham | Reuters

"I'm here."

A terse response from U.S. President Donald Trump's new point man on trade, signalling perhaps some commitment to the Asia-Pacific, when CNBC asked him what message he hoped to convey to trade ministers gathered at an APEC meeting in Hanoi, Vietnam.

U.S. Trade Representative Robert Lighthizer remained tight-lipped on the future of NAFTA, nor would he say if his country would re-enter the TPP trade deal when asked by CNBC.

Lighthizer's caution is understandable. Confirmed in the role less than a week ago, he's been thrust into the international spotlight at a time when U.S. trade relations are widely perceived as protectionist and inward-looking.

His message to trade ministers seeking a sense of the U.S. world view will probably sound like, "I'm new to the job, but be assured the U.S. has not turned its back on trade," said Deborah Elms, founder and executive director of the Asian Trade Centre. "It will be the right rhetoric."

Lighthizer seems to be striking the right tone, at least, in a flurry of hastily scheduled bilateral meetings at the sprawling National Convention Centre in the Vietnamese capital.

After his less-than-30-minute sit down with Canadian Minister for International Trade François-Philippe Champagne, the pair seemed on friendly terms, perhaps because they managed to chat on the flight to Hanoi. They both flew commercial.

"I'll give my personal number to your chief," Champagne said after discussing where they may meet next, a moment caught exclusively by CNBC cameras.

"And I'll do the same," replied Lighthizer.

Later in the morning, the USTR ignored questions after leaving his one-on-one with Japan's Minister of Economy, Trade and Industry Hiroshige Seko, who described the talks to CNBC as "very friendly, very fruitful."

A statement from Lighthizer's team said the U.S.-Japan meeting was cordial and that the officials "agreed to promote mutually beneficial trade, fight trade barriers and trade distorting measures, foster economic growth, and help establish high standards," while working harder together to address "common concerns with respect to unfair trade practices utilized by third-countries."

More clarity, please

It seems that everyone here at the APEC trade ministers meeting is looking for a little clarity from the U.S. side.

"There is this rising tide of protectionism, and particularly new U.S. administration policies, and that makes it more complex because we are here for all the 21 [APEC] economies," said Alan Bollard, the executive director of the APEC Secretariat and former head of the RBNZ.

"So we're looking for more clarity about the U.S. position and we hope we may get some of that with the new U.S. trade representative."

The director-general of the World Trade Organization (WTO) was also hoping for some insight during his meetings with Lighthizer. In an interview with CNBC, Roberto Azevêdo acknowledged the anti-trade sentiment bubbling to the surface in many advanced economies, which he said has to do with the stress in the labor markets and noted that "trade is being blamed for that, unfairly I think."

But he was clear that the WTO is ready to listen to the Trump Administration.

"The question is how can the system help address the concerns that the United States has," Azevêdo said.

He also shared his thoughts on the job faced by the 69-year old Lighthizer, who was a deputy trade representative under another Republican president, the late Ronald Reagan, and helped stop the flood of imports from Japan into the U.S. in the 1980s. The WTO chief praised Lighthizer's experience and knowledge of the multilateral system, but admitted the USTR has a hard, unenviable job ahead of him.

"It's going to be tough to see how he can connect all the dots between what the president says, what the private sector has been saying, what the agricultural sector has been saying, what Congress has been saying, the different parties. It's a lot of moving parts."

Juggling act

Lighthizer has indeed inherited a doozy of a job, juggling the renegotiation of NAFTA, or the North American Free Trade Agreement, the slew of bilateral trade deals his boss wants to work out, and the ever-present questions on the future of the Trans-Pacific Partnership.

On NAFTA, he's already sent a letter to Congress, announcing the Trump Administration's intention to modernize the 22-year old agreement between the U.S., Canada, and Mexico. That means the government can begin renegotiation in about three months.

Canada's trade minister seems confident they'll get a deal done.

"This has been a long-standing agreement," said François-Philippe Champagne. "We've done that 12 times already, so we're very confident that things are going to go very well."

Following his bilateral meeting with Champagne, Mexico's Economy Minister Ildefonso Guajardo said any new agreement must be "win-win-win" for the three nations. And he noted that the clock is ticking.

"There are going to be elections in Mexico in the summer of 2018. There is going to be a Congressional renewal in the U.S. in November. Therefore, it is in the best interest of the parties to really try to align the process to be finished before the elections," said Guajardo. "Recent history has taught us that when you negotiate an agreement, you better be prepared to take it to the legislative branch in the same time period because a new government, you never know if it's going to honor what you negotiated."

Whither the TPP 11?

That may have been a thinly veiled reference to the TPP, and talks over the future of the trade pact, from which the U.S. withdrew in January, are overshadowing this APEC meeting. Ahead of the trade ministers gathering, the leaders of Japan and New Zealand showed they're keen to move the landmark agreement ahead, with or without the U.S.

"Eleven countries have made their judgement on the assumption that the U.S. will be in TPP," said Japanese Prime Minister Shinzo Abe in an exclusive interview with CNBC. "We need to consider what is best and the 11 countries must be united."

And there appears to be a concerted effort here in Hanoi to show unity and positivity on proceeding. Malaysian Minister of International Trade and Industry Mustapa Mohamed said, "We will sort it out. We are open."

Australia's Minister for Trade Steven Ciobo echoed the sentiment: "Six months ago, people were sort of pessimistic about the TPP and thought that without the United States, this wouldn't happen," he said. "Now, we're much more realistic about it. I think that there is possibly a path forward."

New Zealand Trade Minister Todd McClay, whose country is one of two (along with Japan) to have already ratified the TPP, said his nation never thought the pact was dead.

"I would expect from a statement from the ministers when we meet on Sunday to show commitment to moving forward with that set of common rules, an endorsement of the importance of high-quality trade agreements that allow regional economic integration and a pathway toward some form of decision toward the end of the year."

That would mean coming close on the calendar to the APEC leaders' summit, also here in Vietnam in November, a meeting President Trump will be attending.

"There will be a deliverable," said the Asian Trade Centre's Executive Director Deborah Elms. "The intention is to announce [a TPP 11] deal by the leaders' summit."

More details are expected to come after the TPP 11 ministers hold a breakfast meeting on Sunday and release a statement at some point during the day.

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