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POLITICS: PennAve

Obama leaves Japan after breakthrough but no final trade deal

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Politics,White House,Barack Obama,PennAve,Susan Crabtree,Japan,Trade

President Obama ended his trip to Japan Friday without a Trans-Pacific Partnership trade deal, although final round-the-clock negotiations produced a late breakthrough on market access.

“We have a breakthrough, we have a pathway toward the resolution of these issues,” a senior administration official told reporters traveling with the president. “And this is a key milestone because of the linkage to other market access negotiations and ultimate to the closure of the rules negotiations.”

Despite objections within his own party and from labor leaders, Obama hoped to leave Tokyo with a 12-nation trade deal his administration argues is key to helping the United States compete against China's economic dominance in Asia.

Securing the Trans-Pacific Partnership, or TPP, also would help Obama's hopes of finally achieving his longstanding Asia pivot in a region that represents 40 percent of global trade. If the U.S. and Japan overcome their differences, other nations are expected to fall in line and readily agree to the deal.

“It's an important initiative for... setting the rules of the road for the fastest-growing economic region in the world,” the administration official said.

While the president failed to clinch a final deal – Obama and Japanese Prime Minister Shinzo Abe emerged from talks late Thursday saying only that officials from both countries were still negotiating – last minute agreements appeared to produce progress on the key issues of opening access to Japan's auto and agricultural sectors.

Japan's agricultural market has been tightly guarded for roughly 60 years and high tariffs on auto imports make it difficult for the U.S. to compete with domestic Japanese manufacturers, even though many of them have plants in the United States.

Back home, however, the possibility of securing an Asian trade pact is dividing the president's Democratic base with labor leaders and environmental groups celebrating when the deal appeared to be faltering Thursday.

The trade pact would not only jettison or lower tariffs on goods and trade but also set several labor and environmental standards as well as international intellectual property laws. Environmental and labor leaders worry that standards will be lowered because the interests of developing countries often do not match those with bigger, more advanced economies.

“Ironically, if missing this do-or-die moment for the TPP seals its demise, then what will be characterized as a failure now may in fact save President Obama's legacy, given that TPP would cause more American job offshoring, greater income inequality and higher medicine prices,” Lori Wallach, director of Public Citizen's Global Trade Watch, said in a statement.

The U.S. negotiators lack of fast-track authority, which allows trade agreements to receive an up-or-down vote in Congress without amendments, complicated the talks. A fast-track bill was introduced earlier this year but Senate Majority Leader Harry Reid, D-Nev., has blocked it from coming to the floor ahead of the November midterm elections.

Industry leaders, however, believe that Congress could pass both the fast-track and TPP bills in this year's lame duck session after the election.

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Susan Crabtree

White House Correspondent
The Washington Examiner