♠ Posted by Emmanuel in Economic Diplomacy,Trade
at 8/03/2016 03:16:00 PM
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| You have been warned: Singaporean PM Lee puts Obama on notice regarding US TPP non-ratification. |
Exhibit A remains Democrat President Woodrow Wilson and the stillborn League of Nations which was his brainchild, yet floundered in the face of Republican opposition to ratification of US membership in 1918. Fast-forward a century and we have yet another Democrat in office Barack Obama, fighting for ratification of the Trans-Pacific Partnership (TPP)--this time largely in the face of opposition within his own party [more on this later].
After assiduously courting the likes of Japan and Malaysia to participate, the US-promoted TPP is in imminent danger of not being ratified by the US, LoN-style. Both US presidential front-runners express wariness about pushing for its ratification at home, leaving the lame duck Obama with ever fewer opportunities to work with his Republican counterparts before the window of opportunity closes and the new president assumes office.
Because of the wall-to-wall coverage of the US presidential elections, something important happened over the last few days which the media did not report on which is nonetheless of great significance--especially to us Asians. Singaporean Prime Minister Lee Shien Loong--son of the late Lee Kuan Yew, of course--told Barack Obama in no uncertain words that US credibility was on the line over its ratification of TPP (which was an American creation to begin with):
U.S. credibility is on the line over a Pacific trade pact that faces a tough approval process in Congress, Singapore’s Prime Minister said Monday, warning about risks to the U.S.’s reputation in Asia if the deal falls through.Singaporean PM Lee understands the dynamics of US politics, but insists on a tangible outcome nonetheless:
As well as being an “economic game-changer,” the U.S.-led Trans-Pacific Partnership, which does not include China, could “add substance to America’s engagement in the Asia Pacific” region, Lee Hsien Loong said in a speech in Washington D.C. The pact has been signed by the 12 member nations but is yet to be ratified by most of them.
“For America’s friends and partners, ratifying the TPP is a litmus test of your credibility and seriousness of purpose,” Lee said. “Every one of the TPP signatories has had to make sacrifices in order to accept the TPP agreement, and jointly bring about this win-win outcome.”
As the U.S. presidential election draws closer, the TPP is at risk of being caught up in the wash of a growing anti-trade mood, which has seen both two candidates for the White House state publicly they oppose the pact. If ratified and implemented, it would cover around 40 percent of the global economy.
The Obama administration has said it’s committed to ratification and has highlighted a brief window after the election and before the new Congress takes effect as the best chance to get it through. The TPP is the centerpiece of President Barack Obama’s broader economic and military rebalancing to Asia as China’s clout grows. Lee is on a state visit to the U.S. and will meet Obama...Lee's annoyance at this turn of events was evident:
U.S. trade representative Michael Froman last week said tweaking the deal is not an option as it “is a carefully balanced agreement.” Lee reinforced the point that TPP must pass as it stands, saying that “nobody wants to reopen negotiations.”
“We know this has been politically difficult, it’s a very tough election year,” Lee said. “Economic uncertainty has led to concerns about jobs, worries about competition from overseas.” Those are “understandable, even valid concerns, but we hope all parties will focus on the longer term, bigger picture,” he said.
Lee said that while he was wary of wading into domestic politics, the U.S. has "put your reputation on the line" with TPP. "Your partners, your friends who have come to the table and negotiated, each one of them has overcome some domestic political objection, some costs to come to the table to make this deal," Lee said.Edward Luce of the FT says the TPP is the last stand for "US-led globalism," but the same could have arguably been said for the League of Nations in 1918. For the Asian countries that participated, the possibility is very real that the US could not deliver on a trade agreement which they've been at since 2008.
"If at the end, waiting at the altar the bride doesn’t arrive, I think there are going to be people who are going to be very hurt not just emotionally but damaged for a long time to come," Lee said.
If nothing it happens, it will have all been wasted time, money and effort negotiating an agreement that could not be ratified in the home nation of its main proponent. I would not necessarily be the end of "US-led globalism," but rather a major setback for the US in gaining the trust of Asian nations on economic and other issues. It almost goes without saying that China would instead benefit from a US loss of face in the Asia-Pacific.
