United States President Donald Trump has dangled the possibility of a one-on-one trade deal, but a likely 30-day "out clause" if we "misbehave" is one reason the Government is cool on the idea.

Speaking to unionists after formally withdrawing from the 12-nation Trans-Pacific Partnership (TPP) trade pact, which included New Zealand, Trump said: "we are going to have trade, but we are going to have one on one".

"And if somebody misbehaves, we are going to send them a letter of termination, 30 days, and they will either straighten it out or we're gone, not one of these deals where you can't get out of them and it is a disaster."

REUTERS U.S. President Donald Trump signs an executive order formally withdrawing the United States from the 12-nation Trans-Pacific Partnership trade deal.

Trump said the TPP was not the right way to conduct trade deals.



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"So we are going back to those countries one on one and that will be beautiful."

But Prime Minister Bill English said Trump's out clause was "one aspect of it we would find unattractive" in a bilateral pact.

KEVIN LAMARQUE US President Donald Trump holds up the executive order on withdrawal from the Trans Pacific Partnership in the Oval Office.

"If you ask me today I'd think there's a pretty low chance of that happening in a form that we'd find satisfactory, but we wouldn't want to rule it out, any more than we want to rule out other versions of progress on free trade with TPP or not."

He said Trump's withdrawal from the TPP was not unexpected, but it was a disappointment after all the hard work negotiating the deal.

New Zealand had always been interested in close trade ties with the US. It would remain an advocate of open trade, and other deals were in the pipeline in Asia, Europe and the Gulf.

JOHN HAWKINS/REUTERS Trade Minister Todd McClay is disappointed, but not surprised to see the USA pull out of TPPA talks.

He also suggested the remaining 11 TPP nations could go ahead but allow the US to join at a later date, perhaps after Trump leaves office.

Some had suggested the deals negotiated with the US under TPP should remain in the agreement. That would make it more likely the US would rejoin, but that was just one school of thought.

But English said an amended TPP and a bilateral deal would both be "quite a significant challenge" although a TPP without the US would still offer gains.

SUPPLIED PM Bill English says the US pulling out of the TPPA is bad for both us and them.

Ministers from the remaining TPP signatories - Brunei, Chile, Singapore, Australia, Canada, Japan, Malaysia, Mexico, Peru and Vietnam - were expected to meet over the next few months to consider the next steps, and he had asked Trade Minister Todd McClay to prioritise that.

Japan had indicated it was keen to continue even if the US was not part of the deal.

English said the US had provided regional leadership in the past, and New Zealand had always keen to see trade and other interests with the US aligned, but it would be harder now.

Meanwhile, Trump said his approach would boost building and jobs in the US.

"We are going to use common sense and ... do it the way it's supposed to be done. We are going to stop the ridiculous trade deals that are taking everybody out of our country and taking companies out of our country, and it's going to be reversed."

Trump's press secretary Sean Spicer earlier said Trump believed bilateral deals were preferable, as it gave the US more power and flexibility.

He did not specifically mention New Zealand but implied the US was getting the raw end of the agreement while smaller countries like New Zealand, Vietnam and Brunei were getting a sweeter deal.

"When you enter into these multi-national agreements, you're allowing any country, no matter the size... to basically have the same stature as the United States in this agreement," Spicer said.

McClay said the agreement still had value without the US.

"For example, TPP is our first FTA with Japan, Canada, Mexico, and Peru. A number of TPP countries have expressed a strong commitment to the agreement, including Japan which has ratified."

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