Obama No-Show a (Minor) Blow for Asia Trade Talks


President Barack Obama‘s absence from a meeting of leaders from Asia Pacific dealt a symbolic blow to efforts to forge a regional trade pact.

But Mr. Obama’s no-show, due to the drama of debt-ceiling talks in Washington, has little practical effect on the trade talks.

Before news of Mr. Obama’s cancellation, the U.S. already was trying to dial down expectations of a trade deal on the sidelines of the Asia-Pacific Economic Cooperation meeting in Bali, Indonesia. Mr. Obama was to have attended an APEC leaders’ summit there on Monday and Tuesday.

Michael Froman, the U.S. trade representative, told The Wall Street Journal earlier Friday that finalizing a trade deal at the current meeting wasn’t possible.

Mr. Froman said the parties negotiating the deal were in the end-game of talks but weren’t at the finish line yet. He said the talks, though, were still on track.

For sure, negotiators in the trade talks–known as the Trans-Pacific Partnership–still have to overcome some obstacles.

Mr. Obama’s presence would have shown how much store the U.S. puts in the Asian region. (The Center for Strategic & International Studies, in a note before the cancellation, put it this way: “If Obama does not go to Asia at all, U.S. allies and partners in the region will worry that the United States is incapable of sustaining high-level engagement due to political paralysis at home.”)

But, of course, the president isn’t personally involved in the arcane details that often bedevil multilateral trade agreements. The talks were launched in 2003 by Singapore, New Zealand and Chile. The U.S. joined in 2008.

Mr. Obama has made the pact a key part of his administration’s tilt toward Asia. That involves paying more diplomatic and economic attention to the region after years of military interventions in the Middle East.

The trade talks now involve 12 countries: the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Japan joined the talks this spring and other countries are expected to sign up. The goal is to reach an agreement by the end of 2013–but as with all trade talks (think Doha), that might be optimistic.

China isn’t yet part of the talks–although it isn’t excluded–which has added to a view the negotiations are part of the U.S.’s strategy to counterbalance China’s growing might in the region. On Friday, Mr. Froman said the participation of China in the talks was still a long way off.

The agreement could have a large impact on world trade. The U.S. doesn’t have free-trade agreements with Brunei, Japan, Malaysia, New Zealand or Vietnam, according to a report published in August by the Congressional Research Service.

There are still many areas of contention in the talks. Poorer nations like Vietnam want better access to sell their shoes and clothes in the U.S. and other industrialized nations. Some U.S.-based manufacturers, meanwhile, oppose opening their factories to competition from nations with low labor costs.

The U.S. wants better access for its service providers, especially banks, in developing nations. This is likely to be a sticking point.

Washington also will be seeking freer trade with Japan, which protects local farmers with tariffs and quotas. Japan is the U.S.’s fourth-largest agricultural export market.

U.S. dairy producers, on their side, might be worried if New Zealand’s massive dairy industry gets preferential access to the U.S. market.

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