Nov 2, 2014 4:26 AM

Republican gains could aid Obama's Asia trade pact

The Associated Press

WASHINGTON (AP) Big Republican gains on Election Day would be a blow to much of President Barack Obama's agenda, but one stymied item on his to-do list might get a fresh chance to move forward: trade. That could breathe life into Asia-Pacific trade talks essential to his efforts to deepen engagement in the region.

Obama needs special authority, known as fast track, to negotiate trade deals that Congress can accept or reject, but cannot change. It would smooth the way for the Trans-Pacific Partnership, which is under discussion with 11 nations, and help advance separate negotiations with the 28-member European Union.

Fast-track legislation was introduced in January but Senate Majority Leader Harry Reid, D-Nev., would not allow a vote. Many Democrats fear that opening markets to countries with lower wages and standards will cost American jobs. Republicans tend to be more supportive, seeing more trade as benefiting the economy.

With Republicans favored to take control of the Senate and expand their House majority, trade could become a rare point of agreement between a Republican Congress and the White House.

Yet obstacles would remain.

Many Republicans would hesitate to a Democratic president make progress on his agenda. Among Democrats, there's widespread opposition in the House to the Asian pact. Opposition is less strong in the Senate, but it only takes a few lawmakers to use procedural tactics and try to block the deal.

With or without fast track, there's no guarantee that the TPP nations can reach an agreement. The main players, the U.S. and Japan, appear at loggerheads over access to Japan's heavily protected agriculture market.

When TPP trade ministers met in Australia in late October, they announced significant progress in negotiations but no deal ahead of the Nov. 10-11 Asia-Pacific Economic Cooperation summit, where leaders of the 12 nations will want to signal the end is in sight.

Having a clear definition of exactly what's in the pact would help trade legislation in Washington, said Jeffrey Schott, an international trade specialist at the Peterson Institute for International Economics.

"The large majority of the Republican party would support this and would be lobbied hard by the business community to get the legislation through," Schott said. "This is not just a symbolic issue. This is a dollars and cents issue."

But Lori Wallach of the advocacy group Public Citizen said U.S. negotiators have not broached in the TPP negotiations the issue of currency manipulation, despite demands from many U.S. lawmakers that it be included.

"The U.S. Congress will not provide the Obama administration with trade authority in no small part because it has ignored Congress' demands for the deal," Wallach said.

Liberal-leaning groups also fear it will lead to Internet censorship and grant more power to corporations, adding to the reluctance among Democrats to support it.

The ambitious talks seek to cut tariffs and set broader rules on issues such as intellectual property and state-owned enterprises, and apply to countries that account for nearly 40 percent of the world economy and one-third of global trade. Besides the U.S. and Japan, the participants are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The administration views the TPP as strategically important for U.S. outreach to the Asia-Pacific. The main U.S. business advocacy group also views it as an opportunity to expand exports to the region's fast-growing economies.

Christopher Wenk, the senior director of international policy at the U.S. Chamber of Commerce, said Republican congressional leaders have said consistently that trade is an area where they are interested to work with the president, but Obama needs to take the initiative.

"We definitely want to see more leadership from the administration and the president himself on trade issues after the elections," Wenk said.

Republican advocates for the deal have accused Obama of failing on that count. They include the top Republican on the Senate Finance Committee, Utah's Orrin Hatch, a co-sponsor of the fast-track legislation and an important voice in the months ahead.

As the negotiations come down to the wire, the importance of getting fast-track authority grows. Without it, other governments will question whether the deal they agree on with the U.S. could be tinkered with by Congress, which could derail it.

U.S. Trade Representative Michael Froman wrote Foreign Affairs magazine that fast-track authority "would give U.S. trading partners the necessary confidence to put their best and final offers on the table."

Obama is under fire for his handling of foreign policy and he stands little chance of attaining other legislative goals on immigration and raising the minimum wage in a Republican-controlled Congress. Success on trade could burnish his presidency during his final years in office.

"Trade could be a real big achievement of the last couple of years of this president's term," Wenk said.



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