Shutdown Watch: America’s Trade Agenda Flounders

Shutdown Watch: America’s Trade Agenda Flounders

Trade talks between the United States and the European Union are on hold, China is promoting a rival Asian trade bloc in President Obama’s absence, and Jason Furman, the chairman of the White House Council of Economic Advisers, is apparently answering his own phones.

With the shutdown of the U.S. government about to enter its second week, the impasse on Capitol Hill is having clear ripple effects in the global economy. And that’s bad news for Washington.

Try as he might, Obama just can’t seem to execute on his so-called pivot to Asia — the administration’s much-trumpeted shift in foreign policy priorities away from the Middle East and toward the Asia. Regional heads of state gathered on the Indonesian island of Bali on Monday for a regional summit and deliberations on a cornerstone of the White House’s "rebalancing," the Trans-Pacific Partnership, a trade agreement that would open Asian markets to U.S. goods and cement U.S. ties with the region. The U.S. president was supposed to attend that meeting. Instead, he’s sequestered in Washington trying to broker a deal to end the government shutdown. Secretary of State John Kerry is attending in his place, but with the talks unlikely to meet their 2013 deadline, it’s Obama’s absence that’s making all the headlines. Kerry, for his part, tried to put on a brave face. "Do not mistake this momentary episode in American politics as anything more than a moment of politics," he said. "This is an example of the robustness of our democracy."

Meanwhile, Chinese President Xi Jinping is seizing the moment to make the case for a rival trade bloc. The TPP, which so far does not include China, is viewed in Beijing as an effort to contain the country’s regional ambitions. As a result, Chinese diplomats are pushing their own trade group, a move lubricated by generous amounts of Chinese development spending. That effort is being matched by a diplomatic push. On Thursday, Xi became the first foreigner to address the Indonesian parliament, and his efforts at regional diplomacy are leaving regional observers stunned. "You have this sharp contrast between Xi Jinping and Obama, so people will conclude that China is a near neighbor and it is committed," Li Mingjiang, China program director at Singapore’s S. Rajaratnam School of International Studies, told Agence-France Presse.

The Asian trade agenda isn’t the only trade initiative that’s floundering. Facing a shortage of manpower and trade talks on two different continents, U.S. officials were forced on Friday to postpone trade talks with the European Union. Imagine being the official trade representative of the most powerful country in the world — and having to call your European counterpart to inform him that you can’t make a meeting because you’re a wee bit short-staffed at the moment.

If that isn’t enough to convince you that U.S. authorities are emerging from the shutdown with egg on their faces, just consider this silly piece of D.C. theater that played out in the pages of the Washington Post on Friday:

On Wednesday, an official from the International Monetary Fund called the White House Council of Economic Advisers, hoping to schedule a future appointment with Jason Furman, the panel’s chairman. Furman, one of four people still working in the office, answered the phone himself; IMF staffers were soon buzzing about a government in such disarray that one of its top economists has to answer his own phone.

You can’t help but get the sense that the world is standing around snickering behind America’s back.