02:23 - Source: CNN
House Democrats sink part of Pres. Obama's trade bill

Story highlights

House Democrats mounted a revolt against their own president on Friday in refusing to back a key step to achieving a pan-Asian trade deal

There are fears of an unintentional clash between U.S. and Chinese ships and planes in the region

Washington CNN  — 

There’s more than President Barack Obama’s legacy, or his wounded pride, on the line in the showdown with Congress over a huge pan-Pacific trade deal.

As lawmakers appear ready to thwart Obama’s renewed effort this week to secure the power to conclude pacts such as the 12-nation Trans-Pacific Partnership, the implications for U.S. global power and prestige could linger long after he leaves office in January 2017.

With U.S. regional allies anxious about China’s rise and willingness to project military power, Obama has made what is known as his “Asian pivot” – an increase in U.S. economic, military and diplomatic resources to the region – a central foreign policy priority.

READ: Inside the trade bill’s collapse

The TPP is a cornerstone of that process and is meant ensure the world’s most dynamic emerging market evolves into a rules-based system that benefits all nations, and it’s meant to check China’s ability to bully smaller ones, such as America’s friends in Southeast Asia.

But if the TPP is thwarted, U.S. credibility in Asia will suffer, and allies will again wonder whether Obama’s assurances that the United States will remain an essential Pacific power and guarantor of security in the region will be fulfilled. On Monday night, House Republicans appeared to be buying time as they planned to add an extension for a vote on trade adjustment assistance until July 30.

“You are either in or you are out,” stressed Singapore Foreign Minister K. Shanmugam at the Center for Strategic and International Studies in Washington on Monday, assessing the implications of a busted trade agreement for the U.S. role in Asia.

“It’s very, very serious. The President wants it, everybody knows this is important, and you can’t get it through. How credible are you going to be? The world doesn’t wait. Not even for the United States.”

A stern warning from an Asian ally

Shanmugam’s remarks, coming from a senior official of an influential ally fully invested in Obama’s policy of rebalancing U.S. power toward Asia, represented a stunning warning to the United States.

His comments came after Democrats in the House of Representatives mounted a revolt against their own President on Friday, refusing to back a Trade Adjustment Assistance program that compensates workers harmed by global trade. The program’s defeat was part of a wider effort to prevent the President getting so-called “fast track” powers to negotiate trade deals.

READ: Hillary Clinton: Obama should leverage Democratic trade rift for better deal

Such powers would allow Obama to submit completed trade deals to Congress for a vote without amendments – a crucial factor in getting U.S. trade partners such as Japan to make politically painful concessions on reducing tariffs and increasing market access.

The White House has not given up on finding a way to unblock what it has called a “legislative snafu,” but Obama needs to persuade large numbers of Democrats to reverse their growing opposition to the concept of free trade deals, which they see as responsible for sending millions of American jobs to low-wage economies overseas.

One senior diplomat from a TPP nation, speaking anonymously to discuss sensitive trade issues, said the events in the House were so unusual that it was not clear exactly what would happen, though his government had not given up hope for a resolution.

But many foreign policy hands in Washington fear short-term political implications could harm long-term U.S. interests.

“The repudiation of the TPP would neuter the U.S. presidency for the next 19 months,” said former Obama senior economic adviser Lawrence Summers in an op-ed piece in Monday’s Washington Post.

“It would reinforce global concerns that the vicissitudes of domestic politics are increasingly rendering the United States a less reliable ally … it would signal a lack of U.S. commitment to Asia at a time when China is flexing its muscles.”

Obama tried to use this argument as he pleaded with lawmakers in his weekly radio address on Saturday to change their minds on the compensation program.

“Simply put, America has to write the rules of the 21st century economy in a way that benefits American workers. If we don’t, countries like China will write those rules in a way that benefits their workers,” said Obama.

The pivot strategy in jeopardy

In not convincing his party on this point, Obama’s entire Asia pivot strategy is in jeopardy.

While Obama has struggled to stamp his authority on the globe, his Asia policy had until now been seen as a bright spot given the fracturing of nations in the Middle East, the rise of extremist groups such as ISIS and the return of Cold War-style hostilities with Russia.

His promise to channel power and resources toward Asia was widely welcomed in the region as an antidote to China’s rising might among allies deeply concerned about Beijing’s territorial ambitions on the East and South China seas.

Japan, for instance, was deeply appreciative of Obama’s forceful statement in April 2014 that U.S. treaty commitments to its ally were “absolute” amidst rising territorial tensions between Tokyo and Beijing.

Japanese Prime Minsister Sinzo Abe and U.S. President Barack Obama attend the opening session of the at the 2014 Nuclear Security Summit on March 24, 2014 in The Hague, Netherlands.

While denying that he was trying to contain China, Obama upped the U.S. military footprint in the region, sending Marines to Australia and signing a defense agreement that will allow U.S. troops access to bases in the Philippines.

READ: Democrats clip President Obama’s wings

The administration helped lure Myanmar, once in China’s orbit, out of isolation, despite a rocky transition that has not yet led to democracy. He repaired ragged U.S. relations with Malaysia and played upon his ties with regional giant Indonesia after spending four years living there as a boy.

But supporters of the TPP argue that if the U.S. falls short of its trade goals in Asia, its capacity to project power will be overly reliant on military means, a factor that could further increase tensions with Beijing.

“If you are out of the region … not playing a useful role, your only lever to shape the architecture, to shape the region, to influence events is the Seventh Fleet. That is not the lever you want to use,” said Shanmugam.

As it is, growing territorial tensions in East Asia are sparking fears of a military miscalculation between China’s forces and U.S. ships and aircraft deployed in the region.

Fears of a military confrontation

Beijing’s recently announced that it wants to build a navy that can project power far from its own shores, at the same time that China is trading accusations with Washington over its expansion of man-made islands among South China Sea navigational routes crucial to the global economy. There are fears of an unintentional clash between U.S. and Chinese ships and planes in the region.

When it comes to an economic clash, Daniel Price, a former senior trade official in the George W. Bush administration, said lawmakers who voted against the TAA deal as a way of slowing it down had squandered U.S. capacity to write global trade rules.

“This is a cynical repudiation of the President’s international economic and security agenda and a victory for isolationists and fear-mongers,” Price said.

Ernest Bower, a veteran observer of U.S.-East Asian relations, said he believes that ultimately Congress will grant Obama the power to make the deal. But he believes that the theatrics in the House have already dented American interests.

“Friday’s drama was damaging because American partners, particularly in Southeast Asia, are really worried about a narrative they see in Beijing – that is, the Chinese see weakness in Washington right now,” said Bower, an analyst at the Center for Strategic and International Studies.

“I think this scares Southeast Asia because it emboldens China to move even more quickly on its plans to organize Asia’s economic integration and, quickly following that, to try to push the United States out as guarantor of security.”

While a future president could seek to reinvigorate Trans-Pacific Partnership talks if Obama is unable to do so, there’s no guarantee that political conditions outside the United States will prove conducive to doing so.

READ: Inside the trade bill’s collapse