Democrat rocks Obama’s boat

U.S. President Barack Obama’s signature foreign policy initiative is the rebalance to Asia. The rebalance is designed to marry the United States and Asia, the world’s most dynamic region, so that the U.S. can better tap that vitality for the rejuvenation of its own economy and resurgence in the aftermath of two wars.

While most of the attention generated by this policy has focused on the military component, in fact the rebalance is as much an internal rebalancing among pieces of the foreign policy tool box as a geographic one.

From the outset, Washington has emphasized that the rebalance aims to readjust the way the U.S. engages with Asia. Traditionally the military has been the leading edge of the U.S. presence in the region. The rebalance, as then-Secretary of State Hillary Rodman Clinton noted in 2011, begins with forward-based diplomacy. By that, she meant active pursuit of initiatives such as the East Asia Summit, the ASEAN Regional Forum and the sub-leader level meetings that attempt to forge new regional architecture to deal with emerging challenges.

The second core component is U.S. economic engagement, which includes the creation of the U.S.-ASEAN Business Council along with various trade initiatives, chief among them the Trans-Pacific Partnership (TPP), the 12-nation trade deal that was supposed to have been concluded at the end of 2013 but remains a work in progress.

The TPP is a controversial policy, not least because of the secrecy that has surrounded the negotiations. While many details of the deal remain unclear, the U.S.’ broader strategic intent is not.

First, the TPP is designed to jump-start stalled global trade negotiations. The Doha Round of World Trade Organization negotiations is paralyzed; a regional deal is intended to prod them to action. Talk of the TPP prompted the U.S. and Europe to take up a Trans-Atlantic Trade and Investment Partnership (TTIP).

Second, the TPP aims to create a “gold standard” for trade agreements rather than the lowest common denominator approach that has prevailed thus far.

As part of that gold standard, the TPP demands domestic economic reform to lower and eliminate obstacles to exchange. This is a controversial goal because it threatens many entrenched political constituencies. This is especially true in Japan, where implementation of the TPP will take on hitherto protected industries. There is also a fear that under the TPP, corporate interest will supersede government policies in such fields as environmental protection, food safety, and medical and other social services.

Prime Minister Shinzo Abe sees the TPP as an integral part of the third arrow of his economic policy and plans to use it to revitalize Japan’s economy.

Finally the U.S. hopes to make the TPP a “strategic” arrangement, not just a trade deal. TPP is intended to so tightly tie the U.S to Asia that it will eliminate doubts about America’s commitment to the region, by allies and adversaries — an important consideration at a time when nations are talking about a shifting balance of power in Asia and when there are questions about the U.S. readiness to honor its commitments to come to the defense of its allies and partners in Asia.

Given this broader strategic aspect of the TPP, the statement on Jan. 29 by Senate Majority Leader Harry Reid, top-ranking Democrat in the upper house of Congress, that he opposes Trade Promotion Authority (TPA) is a blow to his own president’s plans.

TPA is known as “fast-track authority,” which allows trade bills submitted to Congress to have limited debate and no amendments, the second of which is critical — or so the administration, like many of its predecessors, argues — to the U.S. ability to conclude such agreements.

In theory, say TPA proponents, no other country will finalize a deal with the U.S. if it knows the details can be later changed by Congress.

Reid is unwilling to cede his authority to protect the trade and environmental groups that he sees as critical constituencies. As Senate majority leader, Reid is in a position to kill any trade legislation by refusing to let it get to the floor.

While it is difficult to believe that he would sabotage one of the president’s signature initiatives, he is going to play hardball since he enjoys the support of other Democrats on this issue.

The week before last, 550 labor, environmental and consumer advocacy groups, which have previously backed free trade deals, cosigned a letter to Congress calling on it to reject the TPA.

Ironically this is one of the few issues on which the Republican Party is prepared to back Obama, and the GOP relishes the prospect of a fight within the Democratic Party. They have accused the president of lukewarm support for the TPA and are eager to goad Obama into challenging his base.

A divided Democratic Party will strengthen Republican prospects in November’s midterm elections regardless of the outcome of the TPA squabble.

Nevertheless, the chief U.S. trade negotiator, Michael Froman, insists that a deal on the TPA and the TPP is possible. While securing Congressional passage will not be easy, he is convinced that a deal can be negotiated that will protect the interests that Reid is worried about and still pass muster with U.S. trade partners.

As U.S. Secretary of State John Kerry has noted, many categorical statements in Congress get muted during the legislative process. He may be right, but it appears as though Obama has another front on the fight for freer trade.