Obama’s new trade route

PERRYSCOPE
Perry Diaz

By the stroke of the presidential pen, U.S. President Barack Obama signed into law the most important legislation of his presidency.  Once again he demonstrated his adroit political acumen in an arena full of traps where one false move could dislodge the linchpin of the Trans-Pacific Partnership (TPP).  

Obama and the supporters of TPP believe that it is the key to the success of the “Asian Pivot,” which began as a plan to rebalance 60% of American air and naval forces to the Asia-Pacific Region by 2020.  Now, the scope of the Asian Pivot is expanding to include a complex trade agreement among 12 Pacific Rim nations, whose annual gross domestic product (GDP) of almost $28 trillion represents 40% of global (GDP) and a third of world trade.  The 12 partners are the U.S., Canada, Mexico, Japan, Vietnam, Brunei, Malaysia, Singapore, Australia, New Zealand, Peru, and Chile.

What he signed into law is the “full authority” to negotiate the final version of the TPP, which some people were saying is just a couple of weeks away.  Once the TPP is in final form, the 12 partner nations would then get their respective parliaments or governing bodies to ratify TPP.  In the case of the U.S., the Congress will ratify TPP on an up-and-down vote, no debates or amendments introduced.  That’s possible only because of what Obama had signed into law: the Trade Promotion Authority and the Trade Preferences Extension Act, which includes Trade Adjustment Assistance.

Odd bedfellows

But what is really strange about this legislative action that gave Obama the power to negotiate trade deals that cannot be amended or filibustered by Congress, was that the Republicans supported him. And for the first time in his presidency, Democrats abandoned Obama and dealt him a political embarrassment that could have defined his presidency as a “total failure.”  Indeed, the Republicans would have had voted with the Democrats just to get even with Obama because of the Obamacare victory for Obama.  That would have been the political thing to do: that is, deal him the defeat that they have been trying to do since he ascended to the presidency.   

For the Republicans, they wouldn’t kill TPP just so they can bury Obama politically.  TPP’s ideological value is so high among Republicans that they would sleep with the enemy to keep it alive.   To the chagrin of Democrats  -- who would rather deal Obama his political death than give the Republicans an ideological victory -- Obama must be brimming with joy.  

 “Dead on arrival”

 Odd as it might seem, had the Democrats controlled both houses of Congress, TPP would have been considered “dead on arrival,” which makes one wonder:  Why is TPP so important to the Republicans that they had to embrace the liberal Obama?  

In a recent report in The New York Times, it says: “Opponents in the United States see the pact as mostly a giveaway to business, encouraging further export of manufacturing jobs to low-wage nations while limiting competition and encouraging higher prices for pharmaceuticals and other high-value products by spreading American standards for patent protections to other countries. A provision allowing multinational corporations to challenge regulations and court rulings before special tribunals is drawing intense opposition.”

But Sen. Mitch McConnell, the Senate Majority Leader, had nothing but praise for TPP.  “This is a very important day for our country,” he said. “America is back in the trade business.”

But almost all the Democrats, their allies in the labor unions, environmental groups, and liberal activists who fought the bill (traditional allies of Obama), bitterly disagreed.

Sen. Bernie Sanders, the ultra-liberal independent from Vermont who is running for the Democratic presidential nomination, said: “It is a great day for the big money interests, not a great day for working families.”  

And in a sarcastic retort, Sen. John Conryn of Texas, the Senate’s No. 2 Republican, said: “Occasionally, even the leader of the Democratic Party, the president of the United States, gets things right.” 

Compromise

Obama got all what he wanted and gave little to the Democrats.   It was a lopsided compromise.  But political reality dictates that if you didn’t have the vote, any concession is welcome.  In the end, the opposition collapsed. 

Let’s take a glimpse at the rules Obama signed and how they will help ensure American workers can benefit from the most progressive trade deal in history:

 1.  Lock in the strongest labor protections in history that include: (a) A minimum wage; (b) A ban on forced labor; and (c) Worker safety protection.

2.  Lock in the strongest environment protections in history that will: (a) Protect our oceans; (b) Combat illegal wildlife trafficking; and (c) Combat illegal logging.

 3.  Open up the fastest-growing markets to Made-in-America goods and services.

4.  Make every word of the TPP deal publicly available to the American people for the first time ever.

5.  Provide support and training help for U.S. workers adversely affected by globalization and trade.

6.  Extend the African Growth and Opportunity Act for ten years to: (a) Expand private sector investment in Africa; (b) Instill good governance and human rights politics; (c) Provide economic benefits to Sub-Saharan Africa.

7.  Help U.S. manufacturers level the playing field by enforcing laws that ensure countries like China to trade fairly.

“One Belt, One Road”

With TPP clearly on the road to success, one wonders:  Would China join TPP later?      Yes, many believe that China would join TPP if it would benefit her.    Is TPP all about containing China?  Not so, says the U.S.  Although China hasn’t been invited to join TPP, the U.S. said that she wouldn’t block China from joining the trade pact.  

But TPP is farthest from China’s President Xi Jinping.  High on his agenda is the “New Silk Road Initiative,” also known as “One Belt, One Road” (OBOR).  OBOR has two main components, the land-based “Silk Road Economic Belt” (SREB) and the oceangoing “Maritime Silk Road” (MSR). The strategy underlines China's push to take a bigger role in global affairs, and its need to export China's production capacity in areas of overproduction such as steel manufacturing.  It was unveiled by Xi in September and October 2013 in announcements revealing the SREB and MSR, respectively. (Source: Wikipedia)

When Obama and Xi meet in Washington, DC in September during his first state visit to the U.S., the TPP and OBOR would probably be on top of their agenda.  

As the world’s top two economic powers, a collaboration between the U.S. and China through the TPP would create the biggest trade partnership in history, which begs the question:  Would such collaboration bring peace to the South China Sea?    

At the end of the day, Obama’s new trade route could be the new road to peaceful co-existence. (PerryDiaz@gmail.com)