The Cable

Obama Arrives in Asia, But His Pacific Trade Deal Is Almost Dead

Obama's pivot to Asia remains incomplete without his signature Pacific trade pact.


Barack Obama once declared himself the first Pacific president. But now, as he prepares to meet Saturday with Group of 20 leaders in the Chinese city of Hangzhou during his last visit to the region as president, the centerpiece of his Pacific policy appears moribund.

The president spent five years negotiating the Trans-Pacific Partnership with 11 other countries in North America, Asia and Latin America covering 40 percent of the global economy, making it potentially the largest trade deal in U.S. history. The White House claims the deal benefits American businesses by eliminating tariffs to every TPP signatory, which would make American exports more competitive across Asia. The independent U.S. International Trade Commission found that the deal would increase U.S. annual real income by $57.3 billion, boost U.S. GDP by $42.7 billion, and create 128,000 U.S. jobs by 2032.

But those economic benefits couldn’t sell the public on the deal. Last summer, after Obama teamed up with Republicans to pass fast-track trade authority, which allows the White House to quickly push through trade deals, he seemed poised to get the pact sealed before he left office. One year later, he’s facing a very different reality.

Pushed to the left, especially by the insurgent primary run of Sen. Bernie Sanders, Democratic presidential nominee Hillary Clinton abandoned support for TPP, even though she had championed it as Obama’s secretary of state. Many Democrats are leery of the trade deal’s environmental and labor provisions, and fear it gives too much bargaining power to big business.

Her Republican counterpart, Donald Trump, has made opposition to trade deals like TPP a cornerstone of his campaign. He maintains it would benefit China, even though Beijing is not a signatory; what’s more, the death of TPP gives China the opportunity to negotiate its own Asian trade deal, the Regional Comprehensive Economic Partnership.

“The bullet we won’t dodge is when China goes into countries on the front line and says, as they have been saying by the way, ‘We are here, we are not going away, you better think twice what happens when President Obama leaves town,'” Michael Green, a former top East Asia official in the Bush administration, told CNN Friday.

Also at risk is U.S. credibility. The pact was negotiated in good faith. If America abandons TPP, it would be a major blow to Washington’s regional credibility, as Singapore Prime Minister Lee Hsien Loong suggested during a visit to Washington earlier this month.

“For America’s friends and partners, ratifying TPP is a litmus test of your credibility and seriousness of purpose,” Lee said. “Asian countries want America to be engaged. But we need to know that this engagement will be sustained, we need to know that agreements will be upheld, and that Asia can depend on America.”

Obama insists TPP is not dead, and is promising a push to get it passed during the lame duck session of Congress after November’s election. But if he can’t get it done there, it will fall to his successor. Unfortunately for Obama’s trade legacy, both candidates have vowed to make sure that TPP withers and dies on the vine.

Photo credit: WIN MCNAMEE/Getty Images

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