TPP Is More than a Trade Agreement

Senate Majority Leader Harry Reid made news this week when he said that “everyone would be well advised not to push (Trade Promotion Authority, TPA) right now.” Because trade agreements negotiated by the United States practically require TPA to be concluded, Senator Reid’s comments were described as “putting the brakes” on the President’s trade agenda until after the midterm elections in November.

Senator Reid’s comments should not have been surprising or even troubling. When asked if he would bring TPA to the Senate floor, Reid replied with “We’ll see,” leaving the possibility on the table. That trade critics are pleased with Senator Reid’s comments and that business groups are not isn’t news. President Obama expressed support for trade agreements during the State of the Union address, but not much more than a name-check and not enough to provide political cover to Democrats who might consider supporting TPA. With Senate Minority Leader Mitch McConnell and other Republicans openly advocating TPA, the issue was probably due to get some push-back from Democrats. Tactically, this makes sense because no Democrat in a contested seat (and Senator Reid has many to protect) for the November elections stands to gain from TPA or the deals that it would accelerate, chiefly the Trans-Pacific Partnership (TPP).

Who gains the most now from TPA and the resulting TPP agreement? The White House. This isn’t because of the immediate economic benefits to the United States, or because it provides a template for future large-scale, comprehensive trade agreements, or because the President has advanced the most ambitious trade agenda since the early 1990s.

The White House needs TPA because the TPP is the “pivot to Asia.” The military realignment is important, but the repositioning is mostly relative, driven by drawdowns in Iraq and Afghanistan. The Pivot is a political and economic realignment that aims to improve cooperation and integration among the United States and East Asia. Then-secretary of state Hillary Clinton said this explicitly in her Foreign Policy article, “America’s Pacific Century,” when she wrote “[O]pen markets in Asia provide the United States with unprecedented opportunities for investment, trade, and access to cutting-edge technology. Our economic recovery at home will depend on exports and the ability of American firms to tap into the vast and growing consumer base of Asia.” Military presence was only one out of the six courses of action that Secretary Clinton used to define the Asia Pivot, while the TPP is arguably the key ingredient of three (deepening America's relationships with rising powers, including China; engaging with regional multilateral institutions; expanding trade and investment). If solving the financial crisis and passing health care reform were President Obama’s key domestic policy victories, then the Asia Pivot is primed to be the area where he beneficially changes the course of U.S. foreign policy (the discussions with Iran are still too nascent to determine how far reaching they will become).

Today, there are tensions among Asia’s large powers, and the United States is likely the single entity that can influence the situation. The United States and Asia need each other and TPP is the vehicle that can functionally, economically, and politically help bind them together. The Members of Congress and staff that have drafted the TPA bill have put admirable effort into legislation. Trade negotiators working on TPP have been equally tireless. But TPP, and Asia, cannot wait forever. Many in Asia are already concerned that the Pivot was only superficial and that United States is already moving on. If TPA and TPP remain framed as a trade issue, with all of the political baggage that comes with that, the Administration risks putting TPP on ice for 2014.

Alternatively, the Administration can influence perceptions by framing the TPP as a strategic goal that will be the cornerstone of the Asia Pivot. This would reassure U.S. partners in Asia and answer domestic critics who argue that the Pivot lacks substance. Moreover, it would give the President an achievable goal in advance of his April trip to Asia.

Many have had their say on TPA this week. What matters now is what the President does. We hope he will start by reminding policymakers what’s at stake.

Scott Miller holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C. Paul Nadeau is program manager and research associate with the Scholl Chair at CSIS.

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