U.S. Policy Vacuum in Asia: China Benefits

As President Obama heads to Asia (for which he snubbed the Dali Lama so as not to “offend” our bankers – the Chinese) new challenges await as Obamakare, the “stimulus,” and Cap and Trade have taken up all of his time, leaving trade agreements, crucial to improving exports, creating jobs, and reviving the economy, have gone ignored:

In a meeting with President Barack Obama last week, Lee Kuan Yew, the veteran former prime minister of Singapore, said he felt privileged to meet the US leader at a “time of renewal and change in America and during a period of transition where the world order is changing”.

At private meetings around Washington, however, Mr Lee’s message was rather more blunt.

“You guys are giving China a free run in Asia,” he told Fred Bergsten, the director of the Peterson Institute for International Economics. “The vacuum in US policy is enabling the Chinese to make the running.”

Across the region, concern is rising about the absence of US leadership on trade since Mr Obama took office. Few believe that he has the will or power to restart the Doha round of global trade talks – and he has not asked Congress for a renewal of the president’s fast-track negotiating authority.

Fewer still believe that he will be able to ratify the landmark 2007 US-South Korea free-trade agreement in the face of strong hostility in Congress.

However, while globalisation gets steadily less popular in the US, other parts of the world are moving ahead. South Korea recently concluded a free-trade deal with Europe. Japan is holding similar talks with the European Union. Ironically, the EU broached the talks as a way of protecting itself against the trade-diverting effects of the now moribund US-Korea deal.

Democrats, being in the pocket of “Big Labor” seem more interesting in crowing about having passed Pelosikare in the House (even though it stands no chance of passing in the Senate) than in doing real things to help the American economy.

When will President Obama and Democrats start taking trade agreements seriously?