US tries to calm Asia allies on trade talks

FINANCIAL TIMES

Senior US officials are fighting to convince other members of the 12-country Trans-Pacific Partnership that they can get the ambitious trade deal completed this year despite President Barack Obama’s non-appearance at key talks  because of the government shutdown.  

Speaking on the sidelines of the Asia Pacific Economic Cooperation forum,  Penny Pritzker, US secretary  of commerce, said yesterday  that negotiations  were proceeding without Mr  Obama and that while the  shutdown “delays us getting  on with the business of  business in America … I  don’t think it will derail TPP”.  Attending the Apec meeting and the forthcoming  East Asia Summit in Mr Obama’s place, John Kerry,  the secretary of state, on Saturday tried to reassure  “friends and foes” that the shutdown was a “momentary episode” that would not affect the US position as  the world’s leading superpower or its commitment to refocus its foreign policy on Asia.  But diplomats and investors were not convinced, saying Mr Obama’s absence  at talks with the leaders of  the other TPP nations in  Ball would hold back progress and undermine the US “pivot” to Asia.  “Obviously we prefer a US government which is working to one which is not, and we prefer a US president who is able to travel and fulfil his international duties to one who is preoccupied with his domestic preoccupation,”  Lee Hsien Loong, prime minister of Singapore, a key  US ally and a member of the TPP, told business leaders at the Apec meeting.  The TPP, which is meant to lower trade barriers across a avide range of sectors in 12 Asia-Pacific countries  that account for 60 per cent of the global economy, is one of the main pillars of the Obama administration’s second-term agenda to boost trade and create jobs  and a centrai part of the  “pivot”.  The US president has  been pushing his own negotiators and the other participating governments to reach an agreement on the TPP by the end of the year,  but negotiations have been  held up by sensitive national issues, from US  shoemakers’ fears about competition from Vietnam,  to Malaysian worries about opening up government  procurement.  Proponents of the TPP  are concerned that Mr  Obama’s dysfunctional relationship  with Congress will  make it hard for him to  secure “trade promotion authority”, which would give his administration the power to put trade deals  before Congress on a yesor-no vote rather than allowing legislators to make amendments.  Mr Obama has said renewing this fast-track authority, which expired in  2007, is vital to the securing the TPP and another key trade deal with the EU.  Linda Dempsey, an international economics adviser at the National Association of Manufacturers, a US lobby group, said that if  Congress gets to vote on the  particulars of trade deals, negotiating partners will be reluctant to make concessions on tough issues.  That will delay the TPP and risks watering down a deal that the US, Japan and other participants see as vital to renewing the stalled global momentum on trade liberalisation.  “If trading partners are saying ‘We’re not sure what’s going to happen,  why should we put our best offer on the table?’, then businesses and manufacturers in the US will have less of a good outcome,” said Ms Dempsey.  Ms Pritzker said that she hoped that the administration would get TPA passed, despite the failure to agree a new budget with Congress, which caused the federal government to cease non-essential services on Tuesday.  But Ms Dempsey warned  that it would be a tough vote, with some Democrats hostile to new trade agreements and the president’s  relationship with Republicans in a fractious state.  “We’re going out talking  to companies and companies  are talking to members  [of Congress] in their states  about why this is important,”  she said. “We can’t  just sell to the US market,  we need to reduce these  trade barriers.”