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Obama cancels Asia trip: A catastrophe or just practical?

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(Read caption) Girls ride a motorcycle past a banner near the venue of the upcoming Asian Pacific Economic Cooperation (APEC) Summit in Nusa Dua, Bali island October 4, 2013. Bowing to the reality that the impasse over the US government shutdown, which requires him to remain in Washington, President Barack Obama cancelled plans to attend summits in Indonesia and Brunei next week.

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President Barack Obama's decision to cancel his trip to Asia is being described as a major blow to US diplomatic and trade efforts in Asia, and perhaps a death knell for his so-called "Asia pivot."

The trip was to begin with a visit to Indonesia for the Asia Pacific Economic Cooperation (APEC) summit, then a jaunt to Brunei for two major regional summits. Planned bilateral visits to Malaysia and the Philippines at the back end of the trip had already been cancelled.

To be sure, President Obama had a full agenda: vital issues touching on regional maritime security, border disputes in the South China Sea, and one of the largest free trade areas in history. Long-term US economic and security interests are at the heart of all of it. Over $5 trillion in global trade passes through the South China Sea each year, making it perhaps the greatest hotspot of global commerce.

The rise of China as the region's dominant economic power and arguably its future military one has created both threats and opportunities for the US and its regional partners. In the past few years Obama has made senior US government representation at regional summits a priority, as a way of sending a message that the US is not going to turn its back on a region that is responsible for so much of America's prosperity.

So it’s understandable that Obama's cancelled trip is seen as something of a diplomatic catastrophe. To a certain extent that's right, though it perhaps gets cause and effect back to front. While America's global diplomatic standing would undoubtedly be better off without the budget fight in Congress, the dysfunction and distrust within America's domestic institutions rightly make thoughts of trips abroad at the moment ridiculous.

Nothing positive enough to outweigh the potential catastrophe of a US default,  which would have ripple effects throughout the global economy, could come from this trip. The political impasse at home makes it almost impossible to think that any great breakthroughs would be possible.

Consider the APEC Summit that Obama is skipping. Leaders from almost every Pacific rim nation will be in attendance, and while many APEC summits have been dreary snoozefests in its 24-year history (usually enlivened by world leaders posing for group pictures in variations of national dress) this one promised to be different.

On the table for serious discussions at APEC is the Trans-Pacific Partnership agreement. The US has been shopping this free trade zone since 2009 and Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam are interested. The US government has called the partnership "the cornerstone of the Obama administration's economic policy in the Asia Pacific" and the stakes are high: A free trade agreement across all those markets would be the largest in US history, and one of the largest in human history.

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Asia has been the bright spot in global growth in recent years, led by China (which is conspicuously absent from the partnership talks) but with the whole region fairly booming while growth has lagged in the US, and stalled across much of Europe. With World Trade Organization talks also stalled, the US is seeking to lock in access elsewhere. The presence of Obama at talks on the agreement, rather than Secretary of State John Kerry, who's going in his stead, sends a message of US commitment.

China has been suspicious of the partnership agreement, viewing it as having the potential to represent a trade bloc opposed to its own interests. Obama won't be at APEC, particularly missing the all-important side-bar meetings with other foreign leaders, but the Chinese delegation led by President Xi Jinping will be there bending the ears of all and sundry about his country's increasingly powerful role.

So Obama's absence is bad, right? Well, not exactly.

The same political divide at home that led Obama to cancel this trip is probably going to stand in the way of the US ratifying a new, sprawling free trade area, which would almost certainly involve painful concessions on the US side (you have to grant market access to get market access). While the Republican party has been the traditional party of big business and free trade, it's hard to imagine the current Republican-controlled House signing off on an Obama-brokered deal to remove tariffs and other trade barriers for a host of countries.

In September, Obama said he wanted Congress to grant him the power to submit a completed partnership agreement to Congress for an up or down vote, without legislators having the power to insert amendments. Obama wants that power - called Trade Promotion Authority - so that he can make deals with foreign governments and deliver on them, but Congress is leery of giving him that power. It's not just some Republicans: many Democrats are wary of the TPP, which they say could lead to severe disadvantages for US workers.

As things stand now, granting Obama Trade Promotion Authority, in a crowded legislative calendar with far more pressing issues, isn’t likely any time soon.

So Obama isn't going to Asia. That's not great for his agenda, and perhaps not great for long-term US interests. But until the current mess in Washington is sorted out, there's no much that he can promise to other nations.

Sometimes even the leader of the world's sole remaining superpower has to get his own house in order before he can take his agenda to the world.


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