Obama's bold trade plan faces resistance on Asia trip

Tue Oct 1, 2013 8:00am EDT
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By Stuart Grudgings

KUALA LUMPUR Oct 1 (Reuters) - Malaysia's former prime minister Mahathir Mohamad and opposition leader Anwar Ibrahim haven't agreed on much, if anything, in the 15 years since the latter was ousted from Mahathir's government and then jailed on sodomy and corruption charges.

But a U.S.-led trade pact - the most ambitious since the demise of the Doha round of global talks - has succeeded in uniting the great rivals in condemnation of what they see as a U.S. plot to impose its economic model on Asia.

Their rare unity is one measure of the struggle President Barack Obama faces in pushing forward his signature trade pact, a cornerstone of his plans to create more U.S. jobs, during his sweep of Southeast Asian countries and summits next week.

Obama, who touts the deal by saying that 5,000 U.S. jobs are created for each extra $1 billion in exports, will have a rare chance to push other leaders personally for breakthroughs at an Asia-Pacific Economic Cooperation summit in Indonesia, followed by an East Asia Summit in Brunei, and a visit to Malaysia.

But the proposed Trans-Pacific Partnership (TPP), by seeking unprecedented access to domestic markets, is proving highly sensitive in developing countries such as Malaysia and Vietnam, whose political systems could be shaken by intrusions in areas such as government procurement and state-owned enterprises.

Such sensitivities are increasing the risk of a watered-down deal as politicians succumb to demands for exemptions and opt-outs from pressure groups in countries as diverse economically as Australia, Brunei, Mexico, Singapore and Peru.

"The elimination of tariffs can kill some of our industries, especially those in the process of developing," said Nizam Mahshar, head of the Malay Economic Action Council, which is pressuring Malaysia's government not to cross 75 "red lines" in the TPP. "We are not convinced the TPP will provide what Malaysia needs."

The three-year-old talks, now involving 12 nations, are aimed at establishing a free-trade bloc that would stretch from Vietnam to Chile, encompassing 800 million people, about a third of world trade and nearly 40 percent of the global economy.   Continued...