Giant Trans Pacific Partnership linking Pacific Rim nations is shot down by both US presidential candidates.
The landmark Trans Pacific Partnership (TPP), hailed by Australian and New Zealand leaders just a few months ago as securing both countries’ economic future, is in tatters after both US presidential contenders insist they will never sign it into law.
The secretive deal draws together 12 countries representing two-fifths of the global economy, including the US, Canada, Chile, Japan and the Tasman neighbours – but not China – into a web of common rules governing their trade and commerce.
Now, despite being enemies in politics and opposed on nearly all fronts, Donald Trump and Hillary Clinton are united against Barack Obama and a tradition that has kept America in charge of the world economy’s rules for more than 70 years.
Never before have both main presidential candidates broken with the belief that free trade, or globalisation, is always good for Americans.
The TPP suddenly faces a wall of political opposition among lawmakers who all but set the giant deal in stone when it was signed in Auckland in February.
Parallel negotiations between the US and Europe, known as the Transatlantic Trade and Investment Partnership (TTIP), are even more hamstrung by similar opposition as well as complications created by Britain’s vote to leave the European Union.
The White House has refused to give up, determined to keep in place the system of deals, largely invented by the US after World War II, that run international economic commerce.
Before he left for his summer holiday, Obamapromised one last attempt to ratify TPP in the lame-duck session of Congress before he leaves office.
“We are part of a global economy. We’re not reversing that,” Obama said this month. When he returns to the White House today, salvaging TPP is near the top of his remaining agenda.
Clinton had a very different message at a factory in Detroit recently. In a plant where much of the work is being done on a rocket for a future Nasa mission to Mars, Clinton rejected TPP’s philosophy.
“It’s true that too often, past trade deals have been sold to the American people with rosy scenarios that did not pan out,” Clinton told about 500 union workers and supporters. “Those promises now ring hollow.
“I will stop any trade deal that kills jobs or holds down wages – including the Trans Pacific Partnership,” she said. “I oppose it now, I’ll oppose it after the election, and I’ll oppose it as president.”
The speech marked a dramatic shift for Clinton, who began the negotiations as Obama’s first secretary of state. She has made another awkward reversal on the North American Free Trade Agreement (Nafta), negotiated by George HW Bush and enacted in the 1990s by her husband.
So what now? China, increasing powerful in the Pacific, would like to see a different set of trade rules. If TPP fails, the rest of the countries in Asia will have no choice but to go in the direction that China wants to move.