Barack Obama battles to keep TPP alive

U.S. President Barack Obama, left, shakes hands with China's President Xi Jinping. Photo / AP
U.S. President Barack Obama, left, shakes hands with China's President Xi Jinping. Photo / AP

As United States President Barack Obama attempted to convince allies at the G20 in China and Asean in Laos the Trans-Pacific Partnership remained alive, half a world away in his homeland, the animosity facing the landmark trade deal was clear to see.

Yesterday was Labour Day in the US.

The public holiday celebrates America's labour movement and it was no coincidence the frontrunners to be the next president, Hillary Clinton and Donald Trump, spent it in the blue collar, industrial state of Ohio.

Clinton and Trump do not agree on much, but both are against the TPP, the proposed trade pact between the US, Australia, New Zealand, Japan, Canada and seven other Pacific Rim nations.

"The American worker built the foundation for the country we love and have today, but the American worker is getting crushed [by] bad trade deals like Nafta [North American Free Trade Agreement] and TPP, such high and inexcusable taxes and fees on small business that employ so many good people," Trump, the Republican Party's presidential candidate, said in a video message released to mark Labour Day.

Ohio is a battleground state for the November 8 presidential election.

In comical moments that could have been scenes from the US political TV sitcom Veep, the Clinton and Trump planes landed at the same Cleveland airport yesterday and their motorcades crossed paths.

At one photo op Clinton sat down with union leaders, including Richard Trumka, the president of the AFL-CIO, America's largest federation of unions and a staunch TPP opponent.

Clinton, while Obama's Secretary of State during his first term, was a vocal supporter of the TPP, describing it during a speech in Australia as setting "the gold standard in trade agreements".

Clinton's new stance presents a major dilemma for Obama, who had hoped to push the TPP through Congress after the presidential election and before he left the White House in January.

Obama has few vocal TPP supporters from his own Democratic Party.

Democrats have traditionally opposed trade deals.

This was evident yesterday at the annual Labour Day Breakfast in Boston where Senator Elizabeth Warren attacked the TPP and anti-TPP signs were prominent in the audience.

Republicans in congress, including many who are also up for election in November, were once Obama's unlikely allies with the TPP, but with Trump turning the deal into a dirty word the President's support has been shrinking.

Obama's strategy appears to be to let the election pass and then seek out Republicans and enough Democrats in congress to approve the TPP before he leaves office in January.

"Back home we'll have to cut through the noise once the election season is over," Obama said at a G20 press conference in Hangzhou.

Deal or no deal?

Will Congress vote on TPP?

It's hard to argue with House Speaker Paul Ryan's assessment that TPP doesn't have the votes to pass. Throw in Senate Majority Leader Mitch McConnell's statement that the Senate would not take up the agreement this year and TPP's prospects look dismal. Last year, the House barely passed legislation establishing a streamlined process for approving TPP, called "fasttrack", but the details of the actual agreement were not made public until November. Since then, about a dozen Republicans who voted for the fasttrack process have switched and said they oppose the deal, seemingly eliminating a narrow cushion of support.

How does Obama seal the deal?

The President's case for TPP emphasises two points: First, he says it's good for the economy because it eliminates thousands of tariffs that will lower the price for American-made goods and services. Second, it's good for US national security because it demonstrates America's commitment to being a Pacific power. While the Administration has been making both cases from the get-go, the closing argument for TPP has increasingly taken a national security emphasis. Deputy national security adviser Ben Rhodes said TPP was a "litmus test for whether or not the US has staying power in this region".

Will TPP survive under the next president?

It's not obvious how it could survive, given both candidates say they oppose TPP, but history has shown that opposition during the heat of a campaign can turn to support if the right changes are made. Obama has said ratifying trade deals in the US is never smooth, but eventually they get done. In his first presidential campaign, Obama said he opposed a free-trade agreement with South Korea. He said it didn't do enough to require Korea to open its markets to American-made cars, rice and beef. But nearly three years later, Congress passed a trade agreement with South Korea that Obama called "a win for both our countries". Donald Trump has made his opposition to TPP a hallmark of his campaign. Hillary Clinton supported TPP efforts as Secretary of State but announced her opposition last October, saying the final agreement failed to meet her test of providing good jobs, raising wages and protecting national security. Influential advocacy groups such as the US Chamber of Commerce, the American Farm Bureau and others will try to find a way to pick up the pieces if TPP doesn't make it this year. They've seen the long, winding road that most trade agreements take. "The interests will persist regardless of who is in the office," said Scott Miller, a former director for global trade policy at Procter & Gamble, now at the Centre for Strategic and International Studies.

-AAP, AP

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