More flim flam

President Trump is vaunting his agreement yesterday with the EU. It is, thankfully, a step back from the brink, but mainly due to American concessions. Trump got nothing from the Europeans, only a statement of best intentions that reiterates things that were already happening or supposed to be happening. And they got something from him, especially on reviving the Trans-Atlantic Trade and Investment Partnership negotiations and on the World Trade Organization (WTO):

This is why we agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans….

Secondly, we agreed today to strengthen our strategic cooperation with respect to energy. The European Union wants to import more liquefied natural gas (LNG) from the United States to diversify its energy supply.

Thirdly, we agreed today to launch a close dialogue on standards in order to ease trade, reduce bureaucratic obstacles, and slash costs.

Fourthly, we agreed today to join forces to protect American and European companies better from unfair global trade practices. We will therefore work closely together with like-minded partners to reform the WTO and to address unfair trading practices, including intellectual property theft, forced technology transfer, industrial subsidies, distortions created by state owned enterprises, and overcapacity.

The first and third points come directly from the Trans-Atlantic Trade and Investment Partnership (T-TIP) launched by President Obama. Trump had stalled it and has now agreed to let it proceed. Note that the reference to soybeans is nothing but one in a list of intentions to increase trade. It will happen, mainly because the Chinese are getting them elsewhere. The second point is carefully phrased: the EU wants to import LNG from the US, which was already true before the meeting, but there is no commitment to do it. The fourth point is a concession by Trump to reform the WTO, rather than wreck it (which is what his Administration has been trying to do).

As always, the key to fully understanding statements of this sort is what they omit. No mention here of the steel and aluminum tariffs or the EU retaliation for them. They agreed to disagree on those issues.

I have to hand it to Trump: he is a master used car salesman. The ability to move the stock market with this warmed-over thin gruel has to be admired. Unfortunately that is a one-day flash in the pan. The flim flam man is still far from delivering anything of real value on trade, even as he raises prices to American consumers and embarks on $12 billion in new agricultural subsidies. Yes, it is good that T-TIP has risen from the grave, but it was Trump who unwisely put it there. Credit is due only for correcting his own grave error.