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The Trans-Pacific Partnership and Obama's legacy

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Peter Baker Washington
For more than six years, the short walk from the Oval Office downstairs to the Situation Room has all too often meant bad news or grim choices. Whether it was war in West Asia, Russian aggression in Ukraine or the hunt for terrorists around the globe, President Obama's foreign policy has felt consumed by guns and drones.

So the 12-nation trade deal Obama has been negotiating in Asia took on special meaning for a president eager to change the world. It was a way to leave behind a positive legacy abroad, one that could be measured, he hoped, by the number of lives improved rather than by the number of bodies left behind. And if the Pacific really is the future, Obama wanted to position the United States to lead the way.

As it turned out, the biggest challenge to securing that legacy has been at home, and not overseas, as Obama's fellow Democrats last week shot down legislation crucial to finalising the trade agreement on the grounds that it would hurt rather than help America. Unless he can convince scores of Democrats to change their votes in the coming days, the centrepiece of his much-touted re-engagement with Asia will slip away along with one of the last chances he has to leave his imprint on the world before leaving office.

"If the president cannot get" trade promotion authority "through Congress, it is a disaster for his Asia policy," said Michael J Green, a former Asia advisor to President George W Bush and now at Georgetown University and the Center for Strategic and International Studies. "The administration will be dismissed as lame duck at a time when China is flexing its muscles."

Moreover, Green and other analysts said, a failure to follow through on the trade deal would lead to Japan, Vietnam and other putative partners reversing course on economic reforms or tariff concessions required to join the multilateral trade zone with the US, known as the Trans-Pacific Partnership, or TPP And momentum may shift to economic institutions and agreements that do not include the US, including the new Asian Infrastructure Investment Bank that China is creating over American resistance.

"Domestically we tend to view trade through a political prism by way of winners and losers," said Jon Huntsman, a Republican former governor of Utah who served as Obama's ambassador to China before mounting a campaign to challenge his re-election in 2012. "In Asia, it's seen as directly tied to our leadership and commitment to the region. A failed TPP would create an influence vacuum that others, primarily China, would fill."

The trade agreement, about a decade in the making, would stitch together the United States with 11 other nations along the Pacific Rim, including Canada, Mexico, Japan, Vietnam, Malaysia and Australia, creating a free-trade zone for about 40 per cent of the world's economy. It would lower tariffs, while setting rules for resolving trade disputes, setting patents and protecting intellectual property. China is not part of the group.

Obama, congressional Republicans and business groups argue that it will unlock foreign markets to American goods and level the playing field by forcing Asian competitors to improve labour and environmental standards.

But House Democrats, labour unions and environmental groups argue that it will benefit big corporations, further bleed American manufacturing jobs and fail to adequately enforce the workplace standards it promises.

The administration tried making a foreign policy argument over the last few weeks, maintaining that if the United States does not seal the trade pact, it will be leaving the field to China, which has been exerting its clout in recent years, whether by investing in energy supplies in Africa and West Asia or by asserting claims over disputed waters and islands.

But some on the left argue that the administration is using China to scare lawmakers and exaggerating the competition. "I just don't buy this China boogeyman stuff," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and a former economic adviser to Vice-President Joseph R Biden Jr. "If anything, I see China as being more inward looking, devoting less resources to mercantile-type trade and more to internal investment, consumption and developing human capital."

Supporters of the trade pact hope to hold a new vote this week on the part of the trade package rejected by the House on Friday but will need to secure 90 more votes. Representative Paul D Ryan, the Wisconsin Republican who has worked with the White House to secure trade negotiating authority, said on Sunday that if Obama wanted to avoid being a "very lame-duck president," he would have to win over members of his own party.

"I think that this can be salvaged because I think people are going to realise just how big the consequences are for American leadership," Ryan said on Fox News Sunday.

But there was little indication over the weekend that many minds had been changed on the political left. "We need to regroup and come up with a trade policy which demands that corporate America start investing in this country rather than in countries all over the world," Senator Bernie Sanders of Vermont, a candidate for the Democratic presidential nomination, said on "Face the Nation" on CBS.

The Pacific trade pact was meant to be one of three major foreign policy achievements Mr. Obama wanted to secure before leaving office; all three are on the line this summer. He faces a June 30 deadline to seal an agreement with Iran to scale back its nuclear program and he hopes to follow through on his reconciliation with Cuba by formally restoring diplomatic relations.

Those three initiatives take on even more significance for Mr. Obama as he confronts the reality that he is likely to turn over the White House to his successor without having defeated the Islamic State in Syria and Iraq or resolved the conflict with Russia over Ukraine. He still plans to leave office as the president who ended the American war in Afghanistan, but the security situation there remains fluid.

Amid all those wartime issues, the Asia initiative was to be the long-term investment that would pay off years later. The White House has deployed more military forces to the region and made it a focus. But the trade pact was to be the most tangible element of the policy.

The trade talks have reached a decisive turning point. Negotiators have drafted the bulk of the agreement but other countries are holding back to see if Mr. Obama wins the authority he needs from Congress before completing the pact. With Asia on his mind, Mr. Obama plans to host Prime Minister Shinzo Abe of Japan and President Xi Jinping of China at the White House in coming weeks, meetings that will be coloured by his failure to achieve his trade goal should he not turn House Democrats around.

"There is no Asia pivot without an economic component, and that component is tied up in T.P.P.," said Walter Lohman, director of the Asian studies program at the Heritage Foundation. The challenge for Mr. Obama, he added, is that no matter how important the trade pact may be to his foreign policy, Congress will consider it through an economic lens. "Geopolitics gets it very few votes."

Peter A. Petri, a professor of international finance at Brandeis University, said he just returned from a trip to Asia. "Many people there are dismayed by our political impasse," he said. "They simply don't understand or want an America that is defensive and distant." He said that was actually true of China as well, despite the competitiveness between the two countries.

"The pivot makes no sense without American economic partnerships," he added, "and taking economics out of the relationship would leave only zero-sum strategic competition."
©2015 The New York Times News Service
 

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First Published: Jun 16 2015 | 12:08 AM IST

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