Question Mark Over TPP

As the clock winds down on the Obama administration, its failure to pass its much ballyhooed Trans-Pacific Partnership (TPP) could become an embarrassing failure. Given the lofty rhetoric and expectations surrounding the 12-nation trade pact, its increasingly perilous path to fruition is already causing damage to US standing in Asia and opening the door further for China’s economic and military domination. The fact that India never entered into discussions to join the grouping spares New Delhi some disappointment but the blow to the US credibility is nevertheless a concern for India.


The TPP — the largest-ever regional trade pact — was designed to eliminate or reduce tariffs on some 18,000 products and strengthen intellectual property rules and environmental and labour standards among its 12 signatories, including Japan, Vietnam, Singapore, Malaysia and Brunei. The widening of economic opportunities was intended to complement the US’ strategic position in Asia. But a changing domestic political scene has now raised serious doubts about US lawmakers ever ratifying the TPP.


Populist dissatisfaction with trade pacts has been evident in the phenomenal success of Republican nominee Donald Trump and erstwhile Democratic candidate Bernie Sanders, and caused many TPP supporters — both Democrats and Republicans — to change their tune. Hillary Clinton, once a free trade champion who described TPP as representing a gold standard, is now proclaiming her opposition to it, reducing the likelihood that Congress will push to ratify it in its post-election lame duck session.


President Obama, who strongly supports Clinton, is still planning a final push to get the agreement approved before he leaves office. Arguing that Congress’ failure to pass the Bill would amount to “handing the keys of the castle to China”, the administration has mobilised an array of American political and military leaders to highlight their support of the TPP. They will soon fan out to Asia to lobby the signatory countries for changes that might make TPP more palatable back home. Obama has long argued that if the US and its free trade partners do not write the rules, China would have a free hand to dominate Asian trade and extract strategic benefit.


Besides, America’s trade and security policy is interwoven with Obama’s ‘Asia pivot’ that aimed at balancing China’s growing power. To win the support of Republican and Democratic legislators concerned about China’s growing clout, the Obama administration has invested the trade agreement with explicit strategic significance. Evoking military metaphors, the US defence establishment has argued that TPP’s strategic value to US interests in Asia would be “the equivalent of two nuclear carrier groups”.


The security and political dimensions of TPP were also spelled out by Singapore, one of Asia’s chief proponents of the agreement. On a recent visit to Washington, Prime Minister Lee Hsien Loong bluntly warned that “for America’s friends and partners, ratifying [the trade pact] is a litmus test for your credibility and seriousness of purpose”. But in the feverish US election campaign, where the electorate has shown scant interest in either international engagement or liberal trade regimes, arguments like this do not seem to cut much ice. Senior politicians like Senate majority leader Mitch McConnell, an obdurate Republican opponent of Obama, have all but closed the door by announcing that the Senate will not take up TPP in its lame duck session.


The fact that during his swan song tour of Asia in September Obama and his associates are planning to make last ditch effort to breathe life into TPP only helps to underscore the magnitude of the failure likely to result from shifting domestic winds.