U.S. allies go it alone on giant trade pact

Donald Trump is pictured. | Getty Images

President Donald Trump withdrew from the giant Trans-Pacific Partnership deal, conceived as an effort to counter China’s influence, on his first day in office. | Chip Somodevilla/Getty Images

Eleven nations signed the Trans-Pacific Partnership pact on the same day Trump imposed tariffs.


While President Donald Trump announced steel and aluminum tariffs Thursday, officials from several of the United States’ closest allies were 5,000 miles away in Santiago, Chile, signing a major free-trade deal that the U.S. had negotiated — and then walked away from.

Trump withdrew from the giant Trans-Pacific Partnership deal, conceived as an effort to counter China’s influence, on his first day in office. He called it “another disaster done and pushed by special interests” during his campaign.

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The signing of the pact — which includes U.S. trading partners Japan, Canada and Mexico — is “extremely timely” in the face of “protectionist pressures and pressures that could end up in what nobody wants, which is a trade war,” Chile’s Foreign Affairs Minister Heraldo Muñoz said at the ceremony.

The deal — signed by Australia, Brunei, Canada, Chile, Japan, New Zealand, Malaysia, Mexico, Peru, Singapore and Vietnam — symbolizes a major win for free traders abroad.

The deal, now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, will cover a market of 500 million people and represent almost 15 percent of global trade, Muñoz said. Had the U.S. participated, it would have slashed tariffs for American imports and exports with those countries.

The message from the 11 countries participating is “that they’re committed to free and open markets,” said Barbara Weisel, the former chief U.S. negotiator for TPP. “They see it as an important statement in support of free trade given the actions they’re seeing from the United States.”

All the trade officials at the signing emphasized the importance of free trade, with most adding the deal comes at a time of rising protectionism although they avoided direct reference to the Trump administration.

The “protectionist climate was an additional stimulus to move on and do it, even though the U.S. was not present,” Muñoz said. “We decided it was worth going ahead.”

The signing occurred as Trump signed an order Thursday imposing tariffs on steel and aluminum imports on most countries — a move that former USTR officials and trade experts have decried as protectionist and potentially triggering a trade war.

The tariffs have been widely considered an opening move against China, which is blamed for much of the global excess capacity of steel — even though China is not in the top 10 countries for U.S. steel imports.

“It’s a shame — if [the U.S.] wants to target China, we’ve just taken off the table the most effective tool in TPP,” said Matt McAlvanah, who served as a senior adviser to Obama-era U.S. Trade Representative Michael Froman and is now a principal at lobbying firm Monument Policy Group. “TPP was always to get a foothold with the Asia Pacific, and to be seen as a legitimate alternative to China in terms of providing a platform for high standards trade in the region.”

Many of the United States’ proposals were kept intact in the deal, meaning that the opening of agricultural trade to Japan, for example, will most benefit Canada and other major agricultural exporters.

“Our competitiveness will decline,” Darci Vetter, the former chief agricultural negotiator for the U.S., told POLITICO.

Pact participants have not ruled out letting other governments join after the pact goes into effect. Several other governments — namely China and Colombia — have already expressed an interest in joining, Muñoz said.

Earlier this year, Trump said he would reconsider joining the pact if it were made “substantially better” for Americans — comments that were recently echoed by Treasury Secretary Steven Mnuchin.

Those comments left the “door cracked open a bit, but the focus right now seems to be on other issues. I don’t see this as an administration priority,” Weisel said.

Once six of the 11 countries ratify the deal, it will go into effect 60 days later for those countries. Leaders from the 11 countries expressed hope that it will be in force by the end of the year, but many expect it’ll go into the first quarter of 2019.


The big challenge for Cohn’s successor: Staying close to Trump

White House economic adviser Gary Cohn has one more thing he wants to do before he leaves his post: help Trump pick his successor.

Behind the scenes, one candidate Cohn is pushing is his deputy director of domestic policy, Shahira Knight – a former Hill staffer and ex-lobbyist – to replace him as director of the National Economic Council, according to two people familiar with the discussions.

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As the NEC’s resident tax expert, she was integral to working with lawmakers to develop the historic tax legislation and has allies throughout the Hill and downtown. One Republican lobbyist said she had “the inside track if she wants it.” Knight did not respond to a request for comment.

Whoever inherits the job faces the challenge of retaining the same level of influence as Cohn did. The former Goldman Sachs banker and New York Democrat turned the non-Senate confirmed slot into a powerhouse position and quickly became a “killer” in Trump parlance, who the president largely viewed as a peer.

Toward the top of the short list is also Larry Kudlow, a former associate director for economics and planning in the Office of Management and Budget under President Ronald Reagan who’s now a CNBC pundit and informal adviser to the president. He also keeps close ties to Cohn. But Kudlow has openly rejected Trump’s tariffs push—leading some to say he’ll never get the job.

The new director will have to fight to ensure the roughly 30-person NEC team stays in the policymaking loop in a non-traditional White House where Trump often prefers to make decisions solo.

“Gary had the ability to bond with the president in a special way,” said Paul Winfree, Trump’s former deputy director of the Domestic Policy Council, now director of the Roe Institute for Economic Policy Studies at The Heritage Foundation. “The president respected Gary’s past life and present. They are both rich guys from New York.”

Winfree added: “Gary was also able to bring a certain credibility to the policy discussions based on his life. He could say, ‘Mr. President, I know this works because I’ve seen it work with my own eyes.’ And the president believed him because Gary had clearly made a livelihood practicing what he preached. I suspect that a similar personality would have similar influence.”

Cohn was also able to amass power early on by assembling a powerful group of experienced policy experts that included longtime Washington wonks and operatives, at a time when other agencies were understaffed while waiting for nominees to be confirmed.

But this week’s fight over tariffs exposed the limits of Cohn’s influence. Whoever succeeds him will have to contend with the ascendance of White House aides like Stephen Miller and Peter Navarro who favor tighter immigration restrictions and more protectionist trade measures – anathema to economists, many business executives and Wall Street.

“The greatest challenge someone in this White House faces, whether it is Gary or his successor, is that it’s hard to have a thoughtful policy process that sees several steps down the road, if you do not have a president willing to engage,” said Gene Sperling, NEC director under both presidents Clinton and Obama. “What you saw last week was a more extreme version of policy guerilla warfare.”

At least three NEC staffers are considering leaving the White House within the next few months, according to three people with close White House ties. More could follow depending on Cohn’s successor.

Many NEC staffers have privately told friends and associates they would quit if Navarro, the White House’s resident trade hawk, got the job – a possibility that one senior administration official called a long shot.

Another senior administration official said of Navarro getting the NEC job: “No chance.”

Navarro, however, is said to want the position. He is well-liked by the president because he often tells the President what the President already believes, said Winfree, the former administration official.

There’s also a sense among some administration officials that the White House has yet to hit on a candidate with enough gravitas needed to lead the NEC in the Trump era and must dig deeper for candidates.

At a White House briefing on Wednesday, press secretary Sarah Huckabee Sanders declined to comment on prospective candidates. “I’m not going to get into any naming or a list, but I can tell you that the president has a number of people under consideration, and he’s going to take his time making that decision,” she said.

Kudlow knows Trump well from advising his team on economics during the 2016 campaign and helping to draft an early iteration of the president’s tax plan.

As Republicans advanced their tax legislation on Capitol Hill this fall, Kudlow played a key role in quietly lobbying Republican lawmakers through dinners and private meetings on the need for a lower corporate tax rate and move to a different type of international tax system.

That work helped him build up good will throughout Washington, as Kudlow became closely associated with the legislative highlight of Trump’s first year.

Now the problem for Kudlow is that he firmly believes in free markets and has been publicly critical of tariffs on steel and aluminum, just as Trump is set to impose them with exemptions for certain countries.

Kudlow declined to comment on speculation about the NEC job.

About his disagreements with Trump, Kudlow said, “I’m not opposed to all tariffs, I don’t know if people know that. I just happened to be opposed to this particular action.”

Other names in the mix include OMB Director Mick Mulvaney and the head of the Council of Economic Advisers Kevin Hassett. Few in the administration want to move either men from their current posts, since they are widely viewed as competent and even-keeled.

Other names mentioned include Robert Steel, an investment banker and former Goldman Sachs executive who served in the Treasury Department under President George W. Bush. It’s not clear if Steel would be interested in the job.

Press reports have also mentioned former Federal Reserve governor Kevin Warsh, but Warsh is said by those who know him to not be interested in the position.

Cohn is expected to advise the president on the pick and help with the transition – with input from Cabinet members such as Treasury Secretary Steven Mnuchin, other economic advisers, and Trump’s unofficial kitchen cabinet of longtime friends, real estate developers and businessmen.

But White House officials like to remind outsiders that the president is surrounded by smart, capable aides but that none of them – no matter how competent they seem – are as important to the American public as the president himself.

“At the end of the day, the American people voted overwhelmingly for President Donald J. Trump,” Sanders said. “They voted for his policies, his agenda, and for him to be the ultimate decision maker.”


Trump officials tell Idaho it can’t dump Obamacare

President Donald Trump is pictured. | Getty Images

The Trump administration health officials said that they ultimately had to make sure the law is enforced as long as it’s on the books. | Olivier Douliery/Pool/Getty Images

The Trump administration today threw cold water on Idaho’s plan to ignore key Obamacare requirements, telling the red state that it must follow the health care law.

Idaho was moving to let insurers offer plans that don’t meet the Affordable Care Act’s robust coverage rules — including protections for pre-existing conditions and mandated benefits – in a bid to expand the availability of cheaper health plans. The idea has sparked considerable interest from other red states that have long opposed Obamacare.

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But Trump administration health officials, who’ve worked to unwind Obamacare through regulation and have encouraged states to pursue alternative coverage options, said that they ultimately had to make sure the law is enforced as long as it’s on the books.

“CMS is committed to working with states to give them as much flexibility as permissible under the law to provide their citizens the best possible access to healthcare. However, the Affordable Care Act remains the law,” read a statement from CMS, which oversees the law’s insurance marketplaces.

Under Obamacare, states are the primary enforcers of the law’s private insurance rules, but the federal government is required to step in if a state chooses to not do so.

Several legal experts contended that the Idaho proposal, announced earlier this year, was a clear violation of Obamacare.

Blue Cross of Idaho three weeks ago introduced five health plans under the proposed coverage scheme that it hoped to begin selling next month. State officials and Blue Cross argued that their their proposal passes legal muster, contending that Idaho would still be substantially enforcing the 2010 health care law.

Federal health officials instead encouraged Idaho to take up the administration’s recent proposal to expand the availability of short-term, limited duration plans. These plans are exempt from many of Obamacare’s coverage rules, but critics deride them as “junk insurance” that cherry pick healthy customers and offer extremely limited coverage.


Al Jazeera rejects ‘baseless’ calls for network to register as foreign agent in U.S.

AP Photo

Qatar-based Al Jazeera said it views calls for it to register as a foreign agent “as a direct attempt to curtail media freedom and restrict journalists from carrying out their duties, a right enshrined in the constitution of the United States of America.” | Kamran Jebreili,/AP Photo

The news network Al Jazeera on Thursday dismissed calls from members of Congress for it to register as a foreign agent under U.S. law.

In a statement, the Qatar-based broadcasting giant said the drive to bring its operations under the regulation of the Foreign Agents Registration Act amounts to an assault on press freedom.

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“It is shocking to hear calls being made by a number of US lawmakers to register Al Jazeera as a foreign agent,” the network said in its first public reaction since 18 House members and Sen. Ted Cruz (R-Texas) sent a letter Tuesday urging the Justice Department to investigate Al Jazeera’s compliance with the eight-decade-old law governing lobbying and propaganda efforts in the U.S. by foreign governments and foreign political parties.

“Al Jazeera views such calls as a direct attempt to curtail media freedom and restrict journalists from carrying out their duties, a right enshrined in the Constitution of the United States of America. This call comes at a time when attacks on journalists and media organizations around the world are at an all-time high,” the network said. “Don’t shoot the messenger, journalism is not a crime.”

The letter, spearheaded by GOP Reps. Josh Gottheimer of New Jersey and Lee Zeldin of New York, observed that Al Jazeera was chartered by Qatar and appears to advance the wealthy emirate’s foreign policy goals. The lawmakers also accused Al Jazeera of giving “favorable coverage” to several groups designated as terrorists by the U.S., including Hamas, Hezbollah and Al Qaeda’s Syrian branch, Jabhat Al-Nusra.

The network’s statement disputes all those contentions.

“Since its establishment in 1996, Al Jazeera has continued to maintain its editorial independence from any governmental institutions, Qatari or otherwise, and it steers away from any political or ideological agenda,” the statement read.

Al Jazeera’s leaders noted that it has been subjected to “harsh criticism” from various governments around the world because of what it said was balanced and uncompromising reporting.

“We are alarmed that some US lawmakers are aligned with such despotic regimes, rather than acting as gatekeepers for free speech and free media,” the statement continued.

The lawmakers’ letter came as various pro-Israel groups are locked in a battle with the network over a still-unaired Al Jazeera documentary believed to contain undercover audio and video of the operations of pro-Israel organizations in the U.S. The letter urging an investigation suggested Al Jazeera might have “infiltrated” American nonprofit groups.

The network shed no light Thursday on the status or contents of the purported documentary but did say the news outlet is committed to respecting the privacy of individuals.

“At Al Jazeera we ensure that our news reporting, investigative journalism, programs and all our content maintain strict adherence to editorial and legal guidelines and procedures to ensure the balance between public benefit vs. personal privacy,” the statement read.


Interior spent $139K on Zinke office doors

 Interior Secretary Ryan Zinke is pictured. | AP Photo

“The secretary was not aware of this contract but agrees that this is a lot of money for demo, install, materials, and labor,” Interior Department spokeswoman Heather Swift said in a statement. | Rick Bowmer/AP Photo

The Interior Department is spending $139,000 for new doors for Secretary Ryan Zinke’s office suite, according to records posted online.

The work was recommended by Interior career facilities and security officials, an agency spokeswoman said, not by Zinke.

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“The secretary was not aware of this contract but agrees that this is a lot of money for demo, install, materials, and labor,” Heather Swift, the spokeswoman, said in a statement.

“Between regulations that require historic preservation and outdated government procurement rules, the costs for everything from pencils to printing to doors is astronomical. This is a perfect example of why the Secretary believes we need to reform procurement processes.”

The award to Maryland-based Conquest Solutions LLC was first reported by the Associated Press. Swift said the work is part of a “decade-long modernization of the historic FDR-era building.”