Donald Trump is still more than two months from taking the oath and assuming his office but his effects on national policy are already being felt. Less than one week after Trump’s victory, President Barack Obama has admitted that the Trans-Pacific Partnership deal “has no path forward.” Both Republican and Democratic leaders in Congress are indicating that there will be no action taken on the subject in the lame duck session. The Wall Street Journal has the details this morning.
A sweeping Pacific trade pact meant to bind the U.S.and Asia effectively died Friday, as Republican and Democratic leaders in Congress told the White House they won’t advance it in the election’s aftermath, and Obama administration officials acknowledged it has no way forward now.
The failure to pass the 12-nation Trans-Pacific Partnership—by far the biggest trade agreement in more than a decade—is a bitter defeat for President Barack Obama, whose belated but fervent support for freer trade divided his party and complicated the campaign of Democratic nominee Hillary Clinton.
The White House had lobbied hard for months in the hope of moving forward on the pact if Mrs. Clinton had won.
The deal’s collapse, which comes amid a rising wave of antitrade sentiment in the U.S., also dents American prestige in the region at a time when China is flexing its economic and military muscles.
Senate Majority Leader Mitch McConnell and the guy who had hoped to take his job, Chuck Schumer, chimed in saying that there is no appetite to bring the matter to a vote before the new class is seated. This pretty much represents the final nail in the coffin for the plan.
This comes at an awkward time, particularly when you consider that Obama is preparing to leave today on his final foreign trip. After visits to Germany, Greece and Poland he will be going to Peru to meet with a number of Asian leaders. This was no doubt expected to be a victory lap, with meetings to discuss the ramifications of the deal. Now it will be more of a funeral viewing.
One of the major negative factors in the deal was that it didn’t effectively include China or bind them to any sort of agreements which would curb their tendencies to steal intellectual property and engage in currency manipulation. Being that Beijing is the biggest player on the block, this may come as a comfort to those looking for stronger domestic protection, but as the Journal points out, this also opens the door for China to strike their own replacement deal.
U.S. officials have long warned that failure to pass the TPP, which doesn’t include China, would help Beijing take the lead with another framework, the Regional Comprehensive Economic Partnership, which could be concluded in coming months and would lower or eliminate tariffs among some Pacific countries but not the U.S.
Neither proposed trade framework would have the TPP’s safeguards for intellectual property, the environment, labor or other U.S. priorities, administration officials say. A tariffs-only trade agreement led by China wouldn’t have the same strategic or economic impact as the TPP.
Speaking as the resident opponent to so called “free trade” deals here over the years I’m not shedding any tears for this development. It also seems to be an increasingly popular sentiment among significant segments of the American population. But on the campaign trail, Trump promised to not only block these types of deals but to replace them with smarter deals which work out more to America’s advantage. Next on President Elect Trump’s very long to-do list is showing us precisely what he plans to replace TPP with, and possibly NAFTA as well.