Obama’s Trade Legacy Is At Risk of Disappearing
Obama's two major trade deals, in Asia and Europe, are now at risk of not happening.
President Barack Obama’s trade agenda, both in the Atlantic and the Pacific, appears to be drowning.
Obama has long maintained that he wanted to seal two major trade deals — the Trans-Pacific Partnership with 12 Asian nations, and the Transatlantic Trade and Investment Partnership with Europe — before the end of his administration. Both proposals are cornerstones of his economic legacies.
But both also have been stalled for years — and their immediate forecast appears gloomy. Politics have undermined economic arguments for the deals — by Congress on the TPP, and in Europe for the TTIP.
In a recent interview with the New York Times, Obama said TPP allows the U.S. to shape “ the rules in ways that allow for higher labor standards overseas, or try to export our environmental standards overseas so that we have more of a level playing field.” In a Washington Post op-ed published this week, he wrote that the trade deal, which would cover 40 percent of the world’s economy, would allow the U.S. — and not China — to control the economic fate of the Pacific.
But the TPP lacks the necessary political will from Republican and Democratic leaders on Capitol Hill. Although it’s the sort of deal that could fall to a lame-duck Congress after the November elections, Senate Majority Leader Mitch McConnell has warned the president that the votes are not there, and said its fate should fall to the next occupant of the Oval Office.
Obama made a similar push for TTIP, an agreement with the potential to impact 800 million people, during a recent trip to Europe. “If you look at the benefits for our economies, it is indisputable that they are made stronger” by the deal, Obama said in Germany last week.
But this week, TTIP fell victim to European politics. On Tuesday, after leaked documents showed “irreconcilable” differences between the U.S. and Europe, French President François Hollande said he would not support the deal in its current form, placating leftist French voters opposed to it. Without France on board, there will be no deal.
Chad Bown, a senior fellow at the Peterson Institute for International Economics, told Foreign Policy that the added possibility of the Brexit — the United Kingdom deciding to leaving the European Union — in June looms large over the deal.
“It’s hard for the EU to think about negotiating major trade deals with the U.S.,” Bown said Wednesday. U.S. and EU negotiators “went into it with a lot of energy, but quickly realized that this is really, really hard.”
If the trade pacts slip to the next administration, it’s unclear whether they would ever get done: Both Republican front-runner Donald Trump and his Democratic counterpart Hillary Clinton have said they are opposed to both deals.
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