Obama's fast-track battle with the Democrats

It is not just President Barack Obama's trade agenda that hangs in the balance. The Senate's rebuff to his request for a vote on the fast-track negotiating authority also casts doubt on his "pivot to Asia". The White House downplayed the defeat as a "procedural snafu". It insists common sense will prevail. But the goal of enacting Trade Promotion Authority - an essential step to wrapping up both the Pacific and transatlantic deals - is starting to look arduous.

The Senate was supposed to be the easy part. Moreover, Mr Obama's toughest opponents are within his own party - a new challenge after years of grappling with reflex Republican obstructionism. What remains of his trade agenda will depend on persuading Democrats to climb down and keeping Republicans onside. It also poses a test of America's authority in an era of geopolitical rivalry. China does not suffer from procedural mishaps. Mr Obama must retrieve the initiative.

Hillary Clinton's ambivalence is one measure of how tough that will be. As secretary of state, Mrs Clinton described the 12-nation Trans-Pacific Partnership (TPP) as the "gold standard" of global trade rules. As the Democratic frontrunner to replace Mr Obama, she has stayed ominously silent on the deal. Her stance owes much to political calculation. Mr Obama is opposed by the entire spectrum of Democratic interest groups - from trade unions to environmentalists and consumer organisations.

The president may have erred in presenting it as a personal fight with Elizabeth Warren, the populist senator from Massachusetts. Mrs Warren has made defeat of the TPA into her own cause. Dismissing her as misinformed - and opponents in general as "calcified" - Mr Obama has only encouraged other Democrats to fall in line with her. Their view is that TPP will lower US labour and environmental standards. They are wrong. Mr Obama needs to do a better job of explaining why.

He must also set out how the Pacific deal would differ from the North American Free Trade Agreement, which was passed during Bill Clinton's administration. Nafta has become a touchstone on the US left for all that is wrong with free trade. It was sold as a deal that would generate millions of US jobs. It fell far short.

The left sees TPP as another "giant sucking sound" for corporate offshoring. This is in spite of the fact that China is not a part of TPP. The left says never again. Even moderate Democrats say they will only support a deal if it includes a provision to punish China for manipulating its currency. That would kill any chance of a Pacific agreement and would rightly invite Mr Obama's veto.

Mr Obama must also be careful not to oversell the economic benefits of TPP. At the margins it will create jobs and open up Japan, Vietnam and other markets to US exports and investment. Nor should it be seen as a geopolitical counter to a China that is increasingly willing to make up its own rules and set up its own clubs. It is vital for the US to make clear that TPP will be open to all, including Beijing. Mr Obama should be careful to avoid a game of zero-sum rivalry with the Chinese.

Mr Obama's challenge is novel. He must rely on Republican support to salvage the centrepiece of his economic diplomacy. The clock is against him. America's partners know there is no chance that Congress will ratify a trade agreement in 2016, which is a presidential election year. TPA must be passed within the next few weeks if a deal is to be concluded and enacted before the end of 2015. Capitol Hill's obstacles must be overcome. America's global credibility is at stake.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation

ΣΧΟΛΙΑ ΧΡΗΣΤΩΝ

blog comments powered by Disqus
v