US trade deal’s setback causes mixed reaction in Asia – Washington Post

The failure of a package of trade-related measures Friday in the House was a blow to President Obama, but it was also a blow to his ally, Japanese Prime Minister Shinzo Abe, half a world away.

Abe has made reviving Japan’s stubbornly anemic economy one of his top priorities, and forging a wide-ranging trade pact with the United States, through the Trans Pacific Partnership, was a key part of that goal.

For both countries, TPP has been viewed as a way to counter a rising China. For the United States, it was a way to project influence in Asia; whereas, for Japan, it was a way to regain some of the economic might it has lost as China has gained.

For China, that means Friday’s actions in the House counted as something of a victory. “The outcome won’t affect China that much, but China would be happy to see it and chuckle underneath,” said Shi Yinhong, director of U.S. Study Center at Renmin University.

The House voted down a package of trade-related bills as Democrats rebuffed Obama’s personal pleas for their support for his free-trade initiative.

The package included a measure to give the administration “fast-track” negotiating authority considered crucial for conclude the Pacific Rim trade deal. This would allow the administration to agree to a deal that Congress would approve or reject, without the ability to make amendments.

Japan, the second biggest party to the deal after the United States, has been counting on the deal to boost trade and to help the government usher in much-needed reforms — particularly in agriculture and automobiles — that would be difficult to institute without the excuse of outside impetus.

Akira Amari, Japan’s trade minister and lead negotiator in the TPP talks, said that the result in the House made the situation “extremely delicate.”

“It’s now very tough [to hold minister-level consultations] at the earliest possible time,” he told reporters Saturday, according to the Nikkei business newspaper. But he said there was also no need to be downcast just yet.

“We don’t need to be pessimistic. We will closely monitor the efforts at the House of Representatives,” he said.

But Mainichi Shimbun, a left-leaning newspaper that has been skeptical of the deal, said that Friday’s failure showed Obama’s weakness. “Obama couldn’t convince the Democrats,” the paper wrote. “That showed the deep sense of vigilance against TPP within the Democratic Party and Obama’s declining force. A sense of uncertainty spreads before the second voting.”

Meanwhile, anti-TPP campaigners were jubilant. “Happy news,” tweeted Uchida Shoko, secretary-general of PARC, a social justice group. “The U.S. House of Representatives rejected TPP-related bills! Let’s kill TPP!”

The delay could also be good news for South Korea, which has been seeking to join the talks, only to be rebuffed by the United States, which does not what an additional negotiating partner at what it thinks is a late stage in the discussions.

Seoul has been told to join in the second round but is hoping that any delay will provide it with an opening to join the talks. South Korea already has a bilateral trade deal with the United States, although the implementation has sometimes been rocky.

In Beijing, there was no immediate official reaction to the measure’s failure, but experts said there would be some quiet satisfaction at the problems the United States was encountering in its attempts to project influence in Asia.

China has not been included in TPP negotiations, and U.S. officials have often tried to promote the pact at home as an attempt to counter China’s influence. As a result, many officials in Beijing had viewed the TPP with suspicion, as part of an American “pivot” to Asia designed to contain China.

Some moderates within the government, however, had expressed interest in joining it in the future, as a way to encourage pro-market reforms within China and deepen Asian economic integration.

In recent months, those feelings had increasingly given way to indifference, as China launched its own initiatives to project its leadership in Asia, including the Asian Infrastructure Investment Bank, President Xi Jinping’s Silk Road plans and its own proposed Free Trade Area of the Asia Pacific.

“The failure of TPP is a setback for Obama’s diplomatic strategy, because negotiating nations might start to question the reliability of the United States,” said Shi, of Renmin University, adding that Asia nations would now start to shift their attention away from the TPP and toward the Chinese initiatives.

But Shen Guobing, a professor at the Institute of World Economy at Fudan University in Shanghai, said the TPP and the Chinese initiatives were not direct rivals.

“China’s influence in Pacific cannot compete with the United States right now,” he said. “So it’s hard to say if the failure of TPP will help China to win more trust for its initiatives because countries in the Pacific know the systems of the two big states are fundamentally different.”

Denyer reported from Beijing. Yuki Oda in Tokyo and Xu Jing in Beijing contributed to this report.

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