Obama's pivot to Asia faces setback from fellow Democrat over trans-Pacific trade deal

Senate majority leader Harry Reid announces his opposition to fast tracking of legislation to confirm Obama's proposed Trans-Pacific Partnership

PUBLISHED : Saturday, 01 February, 2014, 3:42pm
UPDATED : Saturday, 01 February, 2014, 4:07pm

President Barack Obama’s foreign policy pivot to Asia took a hit this week, and it came from a stalwart of his own party. The top Democratic in the US senate, Harry Reid, has announced that he opposes legislation that’s key for a trans-Pacific trade pact that’s arguably the most important part of Obama’s effort to step-up American engagement in Asia.

Since Obama rolled out the policy, most attention has been on the military aspect, largely because it was billed as a rebalance in US priorities after a decade of costly war in Afghanistan and Iraq.

But officials have increasingly stressed the pivot is about more than military and cementing America’s stature as the pre-eminent power in the Asia-Pacific as China grows in strength. It’s about capitalising on the region’s rapid economic growth.

Hence the importance of the Trans-Pacific Partnership, or TPP, an ambitious free trade agreement being negotiated by 12 nations including Japan that account for some 40 per cent of global gross domestic product.

“The pivot is the TPP right now,” Victor Cha, director of Asian studies at the Georgetown University’s School of Foreign Service, told a conference at a Washington think tank this week on US policy and the outlook for Asia this year.

The Obama administration’s Asia policy has been welcomed by countries concerned by China’s rise and its expansive territorial claims. During the president’s first term, the US has made progress in strengthening old alliances with nations like the Philippines, forging deeper ties with Indonesia and Vietnam, and befriending former pariah state, Myanmar.

There were problems. Rancorous politics at home forced Obama to withdraw from the East Asia Summit last autumn, raising some questions about his commitment to the region. New military deployments in the Asia-Pacific – a few hundred Marines in Australia, new warships rotated through Singapore – have fuelled Chinese accusations of a US policy of containment while making little impact on regional security.

Asia got little mention in Obama’s State of the Union address on Tuesday, adding to perceptions in some quarters that the pivot has dropped a peg or two in the administration’s policy agenda during the president’s second term.

But he did urge both parties in Congress to approve so-called fast-track legislation needed to make the TPP and a separate trade deal under negotiation with Europe a reality, saying it would open new markets and create American jobs.

The problem for Obama is that a lot of his fellow Democrats are set against a fast-track process that would require Congress to act on the trade deals negotiated by the administration in a yes-or-no vote, without the ability to make any changes.

Reid said on Wednesday he opposed fast-tracking and that lawmakers should not push for it now – a comment that suggests that legislation introduced three weeks ago will go nowhere soon.

While that legislation is co-sponsored by a senior Democrat – Obama’s nominee to become the next ambassador to China, Max Baucus – many in the party join with labour unions in opposing lowered trade barriers, which they worry will cost jobs due to increased competition. That includes the leading Democrat on trade policy in the House of Representatives, who wants any fast-track procedure to stipulate a more active role for Congress in trade policy and measures to address currency manipulation.

So in a bitterly divided Washington, Obama is in the rare position of having more support for a key policy among his political rivals, the Republicans, than from his own party.

On that front too he faces opposition. Top Republicans who want the fast-track accuse the administration of failing to pull its weight to mobilise support for it among Democrats in Congress – a task that will be complicated by November mid-term elections. Lawmakers will be careful to avoid measures that could hurt their prospects of re-election.

In an e-mailed comment on Friday, US Trade Representative Michael Froman remained upbeat about the TPP, saying that momentum developed to advance the TPP talks in 2013 is carrying over to this year. He said the administration is working closely with Congress and is committed to bringing home a deal “worthy of broad support from the American people and their representatives in Congress.”

Ambassadors of Japan and Vietnam both say they want TPP negotiations to be wrapped up before Obama makes a visit to Asia in April, but stressed that the fast track is very important for achieving that.

Japan’s Kenichiro Sasae told the Centre for Strategic and International Studies this week that fast tracking is needed because there are worries the US would seek changes to the agreement. He also acknowledged difficult hurdles remain on auto and agricultural products between the biggest players in the TPP, Japan and the US.

The good news for Washington was that the Japanese and Vietnamese envoys remained strongly supportive of the US role in Asia, viewing it as a stabilising influence in region beset by territorial disputes. Those tensions have heightened fears of a conflict, as an assertive China stakes its claims to contested islands in the East and South China Seas.

State Department spokeswoman Jen Psaki told reporters that from the president on down, the United States “could not be more committed to our relationship with Asia.” Despite US Secretary of State John Kerry’s deep involvement in high-stakes Middle East diplomacy, this month he will make his fifth trip to Asia since taking office a year ago.