FILE-This July 13, 2011, file photo shows Senate Minority Leader Mitch McConnell of Ky. looking on at right, as President Barack Obama meets with Congressional leaders in the Cabinet Room of the White House in Washington. The Democratic president and GOP leader who have been at odds multiple times over the last six years find themselves on the same page of late. (AP Photo/Charles Dharapak, File)Charles Dharapak/The Associated Press
No, Barack Obama has not changed party. He has not joined the Republicans. But there has been a role reversal. Mr. Obama and a large majority of the Republicans in the U.S. Congress are firmly in favour of the Trans-Pacific Partnership trade negotiations among 12 countries, including Canada. The nations involved add up to 40 per cent of the world economy. The opposition comes, overwhelmingly, from Mr. Obama's own party.
On Tuesday, all but one of the Democrats in the Senate voted against granting the President "fast-track authority" to conclude a treaty, without getting bogged down in congressional amendments – as would be Congress's wont, otherwise. Congress could still deliver a flat yes or a flat no in the endgame.
Then, on Wednesday, senators cobbled together a compromise that would give Mr. Obama fast-track authority, by also voting in favour of another bill, designed to prevent TPP member countries from engaging in so-called "currency manipulation."
In the House of Representatives, the conflict between the President and the Democrats on fast-track authority will break out all over again. It may be even more intractable.
Meanwhile, Senator Elizabeth Warren of Massachusetts (who swears up and down that she is not running against Hillary Clinton for the Democratic nomination) is particularly worried about investor-state dispute settlement arbitrations – a "rigged process," she says.
In fact, ISDS proceedings by investors against governments are not numerous, and often are settled. Above all, they are not extortion, as Ms. Warren seems to think. It's true, however, that the TPP negotiations should work toward a trade and investment disputes court, like the World Trade Organization's tribunal. At present, ISDS arbitration decisions can be quite inconsistent.
But Congress's side agreement to stop currency manipulation is not viable for the future TPP area. Currencies can move up and down for a whole range of reasons. This proposal is reminiscent of the unlamented European Monetary System from 1979 to 1992.
Mr. Obama's failure to get fast-track authority so far does not doom TPP – not yet. But he will have to engage in far more effective diplomacy within his own party. He can't depend only on his Republican opponents.