Obama's Pivotal Week and the TPP


And I have been traveling and unable to update this blog space in the last few weeks.  There will be more occasional posts over the summer months, and then we will pick up the pace again in September.

Meantime, I wanted to share with you all my last piece, from June 30, in the Nikkei Asian Review, on how Obama's pivotal last week of June began with Congressional approval of "fast track" trade authority to allow finalization of the Trans-Pacific Partnership.  But now the hard work of selling the TPP itself remains a major hurdle.  The link is here.  But I will also paste it here for your ease.  Happy Summer, everyone!


Nikkei Asian Review

June 30, 2015 2:00 pm JST


Obama's 'transformational' week makes history but sets new challenges

KEITH B. RICHBURG, Contributing writer

U.S. President Barack Obama scored a hard-fought victory for his foreign policy agenda on June 24, when Congress narrowly approved "fast track" negotiating powers that will allow him to begin finalizing the Pacific trade agreement at the heart of his announced rebalancing to Asia.


     The trade victory kicked off an intense 72-hour period in Washington which may be remembered as the most consequential phase of Obama's second term, cementing his place as a "transformational" president who shifted the nation's trajectory in a way not seen since Ronald Reagan moved the country to the right in the 1980s.

     The day after Congress gave Obama expanded trade negotiating powers, the U.S. Supreme Court upheld a key tenet of the president's sweeping health care reform law, his signature domestic achievement that has already remade health care in America.

     The following day, in a rare Friday ruling, the Court said for the first time that gays and lesbians had a constitutional right to marry someone of the same sex -- a view strongly backed by the White House, which was symbolically lit in rainbow colors to celebrate the decision.

     Immediately after that ruling on same sex marriage, Obama traveled to Charleston, South Carolina, the scene of a mass shooting at a black church by an avowed white supremacist. There, Obama delivered one of the most powerful and emotionally charged speeches of his presidency, in a eulogy for the church's slain pastor.

Progress from tragedy

Touching on American society's residual racism, Obama signaled that he wanted to use the tragedy, and his remaining time as president, to address problems such as the high rate of imprisonment among African-American men, inadequate schooling for minorities, lingering poverty, and racial disparities in business hiring practices.

     Obama's health care law is now largely safe until his successor takes office, and the gay rights agenda he championed is buttressed by a powerful court ruling, so those parts of his domestic legacy appear secure. He could make a further mark speaking out on race. But on foreign policy, he is still searching for a similar legacy-defining achievement.

     The chances of a nuclear deal with Iran remain problematic, and in the same week as the fast-track triumph, a spate of terrorist attacks in Tunisia, Kuwait and France provided a somber reminder that the world is still facing a persistent threat of violent Middle East extremism.

     Even as the danger from Al Qaeda appears to be receding, the Islamic State militant group, known as ISIS, has emerged as a new threat capable of using social media to recruit followers willing to conduct violent suicide missions, including in the U.S.

Meanwhile, China has largely rebuffed Obama's overtures for a partnership on issues such as nuclear proliferation and cyber security, and continues to focus on long-standing irritants such as Washington's arms sales to Taiwan while also trying to undermine U.S. domination of global institutions such as the World Bank and the International Monetary Fund.

     Amid these foreign policy failures, Obama's single positive achievement was supposed to be the Pacific trade agreement, which is being negotiated with 11 other Pacific Rim countries. However, while the victory over fast track powers is crucial, it marks just a first step.

     The pact, formally known as the Trans-Pacific Partnership, faces a series of further hurdles, including an inhospitable calendar that will likely see it caught up in the heat of next year's U.S. presidential election contest.

     The number of Democrats who defied the White House in voting against giving Obama the negotiating power -- and the energy and resources expended by organized labor, environmentalists and other opponents in fighting it -- should serve as a warning that the deal's final passage is far from assured. The battle ahead promises to be even more acrimonious, with the outcome even less certain.

     "This is very far from here to getting a TPP agreement that passes on the Hill [the U.S. Congress]," said Kenneth Lieberthal, a China expert with the Brookings Institution. "Given all that we have done in Asia, to have this fail would be a body blow to our credibility out there, and add to the narrative of dysfunction in Washington. That would be a self-inflicted wound of enormous consequence."

     The TPP, tying together the economies of the U.S., Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Singapore, Malaysia, Vietnam and Brunei, was seen as the cornerstone of Obama's rebalancing to Asia.

     The pact outlines rules on copyright and patent protections, opens markets for American services sectors such as finance, software and information technology, and lowers tariffs among the participating countries. It would also impose new standards for labor and environmental protections.

     The massive deal covers 40% of global gross domestic product and a third of world trade. It purposely excludes China. But the goal is to entice the Beijing regime to one day aspire to join -- which could lead to more market-oriented reforms in the communist country.

Open-market commitments

With the vote for "fast track" negotiating powers won, Obama's negotiators can now finalize the language of the TPP with the other 11 countries. But much work remains.

     Specifically, Japan has yet to make firm commitments to open its protected markets for rice and automobiles. The U.S. still has tariff protections for its sugar industry. A provision to allow member state companies to compete fairly with state-owned businesses is running into resistance from Vietnam and Malaysia. And Vietnam has yet to meet the pact's terms in allowing free labor unions.

     Even when those details are hammered out in a broad agreement, the entire deal, expected to run to more than two dozen chapters and thousands of pages, must be written into legal language, including acceptable translations in all the various languages.

     In the U.S., the next step in the process is a 90-day open review period, when the public and the Congress will have a chance to assess the entire text. Congress also has to pass any accompanying legislation needed to implement the terms of the deal.

     With so many key details still being negotiated, and the open review period still to come, it appears unlikely that the deal will be ready for a final Congressional vote until early next year. The first primaries of the 2016 presidential election will be held in early February, which means that the final stages of the TPP process will become enmeshed in U.S. presidential politics, with candidates jockeying for advantage by picking apart any unpopular provisions of the trade deal.

Timing troubles

The timing is particularly problematic for Hillary Clinton, Obama's initial secretary of state, who is the favorite to win the Democratic nomination for president but is facing a spirited underdog challenge from Senator Bernard Sanders, a Vermont socialist running as a Democrat, and Martin O'Malley, a former governor of Maryland. Both Sanders and O'Malley oppose the TPP and are hoping to harness the energy of the left wing of the Democratic Party in the primaries.

     Clinton, it is believed, is instinctively for free trade and for the TPP. She backed it enthusiastically as secretary of state. Her husband, former president Bill Clinton, succeeded in getting the North American Free Trade Agreement with Canada and Mexico enacted in 1994 over stiff Democratic Party and union opposition.

     Hillary Clinton has equivocated in the last few weeks, however, seeming to back a Democratic rebellion against Obama in the House of Representatives. Next year, in the heat of the primaries, she will be under enormous pressure to oppose the TPP from union allies, environmentalists and others on the left.

     On the right, Republicans are typically for free trade, which is a major priority for the party's business base. But in the final Senate vote on TPP, Ted Cruz and Rand Paul, both declared candidates for president, voted against giving Obama expanded negotiating power.

     Two other Republican senators running for president, Marco Rubio and Lindsay Graham, voted in favor, showing a split between the party's pro-trade "establishment" wing and its anti-trade "populists."

     In recent days, the White House has been celebrating an unusual winning streak for a president who was derided as a lame duck after last year's midterm elections, when the Republican Party made sweeping gains.

     But the "fast track" vote was just the beginning of the TPP process, and the hard work of finalizing a deal and getting it ratified by Congress remains to be done. On the pivot to Asia, Obama's legacy is still far from sealed: it may -- or may not -- fall victim to Washington's continuing political machinations.


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