- The Washington Times - Monday, June 15, 2015

President Obama’s stunning loss in a showdown trade vote last week didn’t just complicate his relations with fellow Democrats on Capitol Hill.

American credibility with its Asian-Pacific trading partners could also be on the line as allies and adversaries around the world reflect on Mr. Obama’s loss and what it says about his economic clout for his remaining time in the White House.

The House vote not to give the president “fast-track” authority to negotiate trade deals has jump-started concerns among Pacific Rim countries that the president’s own party could force the downfall of the biggest free trade deal in history if not passed during a re-vote set for Tuesday night, analysts said.

“Lack of approval could be taken as a lack of commitment by the United States to free trade,” said Barbara Kotschwar, a research fellow at the Peter G. Peterson Institute for International Economics in Washington. “I think it’s important the U.S. is seen as engaging as the rest of the world is waiting to see what happens.”

Singapore Foreign Minister K. Shanmugam was even more blunt, saying at an event at the Center for Strategic and International Studies, “If you don’t do this deal, what are your levers of power?”

“The choice is a very stark one: Do you want to be part of the region, or do you want to be out of the region? And if you are out of the region, your only lever to shape the architecture, to influence events, is the Seventh Fleet and that’s not the lever you want to use,” Mr. Shanmugam said.

Unless Mr. Obama can change some minds in Congress, he risks seeing both his 12-nation Trans-Pacific Partnership (TPP) and an equally ambitious Transatlantic Trade and Investment Partnership (TTIP) with the European Union bog down, deals meant to reassert American economic primacy and diminish China’s rising push as an economic counterweight and rival center of economic gravity in Asia.

A rejection of the deal further muddied Mr. Obama’s foreign policy plans, but some analysts predicted it will likely only be a temporary setback to agreements that have been years in the making.

“It’s not the end of Obama’s legacy,” said Jason Marczak, deputy director of the Adrienne Arsht Latin America Center at the Atlantic Council. “Even if the trade fails again this week, there’s still a door open for some time for a deal with the Senate to be put back to the House.”

“Most TPP countries already have a free-trade agreement with us. [They] know full well how difficult it can be to get something passed through Congress,” he added.

Even some of America’s top trading partners say they remain optimistic of an eventual deal, one that proponents say would open up foreign markets to American goods, lower tariffs, prevent currency manipulation and set restrictions to protect patents and other intellectual properties.

“The fastest schedule for reaching a broad agreement at the ministerial level has become more difficult,” Japan’s Economy Minister Akira Amari said following the vote, “but we don’t need to be too pessimistic.”

Added Andrew Robb, Australia’s trade minister, “I remain hopeful the relevant legislation will ultimately pass, which would provide the necessary momentum to conclude negotiations. There is always a lot of cut and thrust in these things and politics being played out.”

But U.S. Trade Representative Michael Froman reportedly spent much of the weekend calling fellow trade ministers in Asia to calm nerves and assure them of the Obama administration’s support for open trade, the Financial Times reported.

The Obama administration hoped to nail down a final agreement in 2012, but negotiations suffered from controversy surrounding the secrecy of the terms of the agreement and from attacks by labor unions and environmentalists who argued that it would cost U.S. jobs, degrade labor and environmental regulations, and help corporations while doing little for American workers.

Even if the trade deals are not dead, the Capitol Hill clash may push success much farther down the line.

“If the [trade negotiating authority] doesn’t go through, it’ll significantly slow negotiations,” said Mr. Marczak. “It won’t stop, but we won’t see another round for an extended period.”

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