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 Obama now has the response he did not want: A congressional rebuff
to his legacy-defining trade agenda has dealt a humiliating blow -
at least for now - to his effort to reassure Asian allies of U.S.
engagement, and could allow China to expand its clout at
Washington’s expense.
The vote on Friday to sidetrack a bill vital to Obama’s proposed
12-nation Trans-Pacific Partnership (TPP) threatens to derail the
economic centerpiece of Obama's vaunted “Asia pivot,” widely seen as
intended to face down the growing competitive threat from China.
At a time of heightened tensions over Beijing’s increased
assertiveness in the South China Sea and its expanding economic
influence across the Pacific Rim, the setback has already added to
regional allies' doubts over U.S. leadership.
"The history of East Asia and Asia-Pacific is being rewritten,"
Singapore's Foreign Minister K. Shanmugam told an American audience
in Washington on Tuesday. "You are not in the driver's seat right
now."
Shanmugam met National Security Advisor Susan Rice on Tuesday, a
U.S. official said, signaling that the White House was looking to
ease allies’ concerns while it scrambles to salvage its signature
trade initiative.
It may be a hard sell as Obama faces an uphill fight to convince
dozens of Democratic lawmakers to change their minds.
 Bates Gill, chief executive officer of the United States Studies
Centre at the University of Sydney, said the failure of TPP would
“negatively impact views in this part of the world about America’s
role here."
The threatened collapse of TPP, which would cover 40 percent of the
global economy, could also breathe new life into China’s alternative
proposal called the Free Trade Area of the Asia Pacific.
U.S. officials have been at pains to insist that TPP is not intended
to isolate China, America's top economic rival. But the drive for
the far-ranging trade pact is widely seen as a move to reassert U.S.
influence and that of key allies like Japan as China cuts deals and
make investment inroads across Asia.
"The rest of the world is not standing still, they are moving
ahead,” U.S. Trade Representative Michael Froman told Reuters,
pointing to negotiations on trade deals between China and Australia
as well as between China, Japan and South Korea.
The latest dysfunction in Washington could be seen by Beijing as a
sign of U.S. weakness that will make it harder to get the Chinese to
give much ground on issues that divide the world’s two biggest
economic powers, one U.S. official said.
U.S. concerns about suspected Chinese links to massive cyber attacks
on federal computer systems are expected to cloud annual high-level
talks between the two sides in Washington. The June 22-24 Strategic
and Economic Dialogue will lay the groundwork for a visit by Chinese
President Xi Jinping in September.
“Certainly, the United States looks weak in terms of playing a
leadership role in promoting a higher level of free trade,” said Jia
Qingguo, dean of the School of International Studies at Peking
University and an adviser to China’s Communist government.
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'NOT IN THE DRIVER'S SEAT'
No one is suggesting that Obama - who has repeatedly insisted on
U.S. resolve to remain a Pacific power – is ready to abandon the
economically dynamic region.
Despite its military focus on the volatile Middle East, the Obama
administration seems to be making good on its promise to gradually
increase troops and equipment in Asia-Pacific.
But some allies want more action, not just words, as China flexes
its muscle in maritime disputes with its neighbors.
Beijing this year has accelerated large-scale land reclamation on
tiny islands and reefs in contested waters of the South China Sea,
leaving Washington struggling to craft a response without triggering
a military confrontation.
Many in the region worry that Obama’s waning legislative power at
home could mean a diminished U.S. commitment during his final 19
months in office, leaving China to fill the void.
Obama’s slap-down by fellow Democrats in the House of
Representatives last week has shown the shortcomings of the White
House’s strategy of trying to convince them that they should fear
China’s rise more than the domestic union-led coalition seeking to
block the trade deal.
Lawmakers on Tuesday extended the deadline for a second vote on a
key part of so-called fast-track authority legislation, buying more
time for supporters to rescue the bill.
Though U.S. officials say that for now the trade deal is too
important to Asian partners to turn their backs on Washington,
experts believe momentum could shift in Beijing's favor.
Nervous Asian countries could move closer to China, giving further
impetus to projects like the new Beijing-led Asian Infrastructure
Investment Bank, which many American allies, including the
Europeans, have decided to join despite U.S. objections.
In another display of checkbook diplomacy, China is expected to
pledge a multi-billion dollar investment in Europe's new
infrastructure fund at a summit on June 29 in Brussels, according to
a draft communique seen by Reuters. Beijing aims to create a $40
billion “Silk Road” of modern infrastructure linking Asia and
Europe.
“The Chinese are delighted because Obama’s problems highlight that
America is unpredictable," said Dean Cheng, a China specialist at
the conservative Heritage Foundation in Washington. “And they have
large sums of money to throw around.”
(Additional reporting by Krista Hughes, Richard Cowan and Idrees Ali
in Washington, Michael Martina in Beijing and Matt Siegel in Sydney;
editing by Stuart Grudgings.)
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