TPP: At last, a significant act in Asia by Barack Obama

The completion of the Trans-Pacific Partnership, as well as being a substantial boost for the Australian economy, is the greatest, perhaps only, significant achievement of Barack Obama
in Asia.

It is belated, and it’s not quite there yet; it still has to be ratified and you can take nothing for granted with the US congress, but in the face of the President’s strategic impotence in the Middle East, it demonstrates that the US is still capable of providing leadership, especially in Asia.

As the military side of Obama’s pivot to Asia has been underwhelming, and badly affected by Washington’s budget chaos, it is the economic dimension of Washington’s Asia diplomacy that should always have had a higher priority.

The deal is not perfect, but it is the biggest trade deal in the world since the Uruguay Round was completed more than 20 years ago.

It will provide substantial new market access for Australia and its 11 other members.

Its greatest long-term significance lies in three areas other than traditional trade in goods, that is, its implications for investment, for trade in services and for geo-strategic leadership.

This reconfirms that the US system can still work and is capable of providing economic leadership in Asia.

The Obama administration, with its characteristic clumsiness and tin ear, overemphasised the geo-strategic element.

The TPP should always have been sold for what it is — a powerful trade liberalisation deal with huge economic benefits.

The geo-strategic dividends should have been allowed to pay themselves, and would have been more powerful if understated, as they would have been by a more confident and competent Washington administration.

The 12 nations involved provide 40 per cent of global gross domestic product. And that is without four key Asian economies — China, Indonesia, India and South Korea.

The absence of China is the most important element for Australia and underlines again the overwhelming importance of the Australia-China free-trade agreement and the utter folly of Labor threatening this deal.

One reason the TPP worked finally was because the US trade representative, Mike Froman, is a friend of Obama. Nothing happens in this administration unless it comes from the inner sanctum of the White House or one of Obama’s cronies.

The fact Obama gave the job to Froman was an early indication he might be serious about it, although this lack of advocacy for the deal left that very much in doubt.

But finally, the deal has been done. The TPP demonstrates that we, like the rest of Asia, benefit from US leadership. That leadership is in short supply at present: the TPP is its best exhibit.