America’s claim to global economic leadership has suffered another blow. After China’s coup in getting 57 countries to join its new Asian infrastructure bank, the United States Senate has delayed a bill that would have given President Barack Obama authority to negotiate a new Pacific trade pact. The damage to American diplomacy is clear, but for the world economy it’s less severe.
For a country which aspires to shape global economic rules, the latest kerfuffle is highly embarrassing. Senators from Obama’s own Democratic Party joined forces to deny the president the power to finalise the 12-nation Trans-Pacific Partnership. Without so-called “fast-track” authority, it will be almost impossible to negotiate an agreement. The Senate, whose Republican majority broadly supports the deal, may yet find a way to give Obama the necessary powers. Even so America’s prospective partners, which range from Japan to Chile, could be forgiven for wondering whether the much-delayed agreement is worth the wait.
The timing couldn’t be worse. It’s only a few months since China scored a diplomatic triumph by persuading several Western countries to defy the United States and join the new Asian Infrastructure Investment Bank. The AIIB is central to Chinese President Xi Jinping’s ambition to strengthen Chinese trade links with Europe, Africa and the rest of Asia. The TPP, which does not include China, is America’s best opportunity to draw some of those countries into its economic orbit.
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