The Obama administration’s failure to pass a major trade deal will undermine global confidence in the ‘crumbling’ US leadership, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told Newsmax TV.
"This trade pact involved Asia, which is where most of the economic growth is going to be and the countries in this pact actually represent about 40 percent of the global economy. So this is huge," he told "Newsmax Now."
"Should they find another suitor and alternatives to trade agreements with other people, it could seriously undermine our economy strength going forward," he said.
Amid opposition from Democrats, the House failed to pass a bill that would have cleared the way for Obama to negotiate a sweeping trade deal with Pacific countries.
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House Democrats were instrumental in defeating the measure, known as Trade Adjustment Assistance, which provides aid to U.S. workers who lose their jobs as a result of foreign trade.
While Democrats support the program, they oppose major parts of the Trans-Pacific Partnership (TPP), which faces opposition from labor unions.
"Most of the consequence will be with American economic leadership. The U.S. has a high status in the world with a reserve currency and a lot of that has been because of its ability to handle its political agenda. But lately that's been crumbling," he said.
"This latest trade pact was something we thought of, was our idea, and then we voted it down," he said. "And it's undermining some confidence in the crucial U.S. leadership."
Meanwhile, Hutchinson is far from alone in warning that the failure of such a trade deal hurts the U.S.' image.
Former U.S. Treasury Secretary Larry Summers warned that failure to move forward in Congress on a 12-nation trade deal spearheaded by the United States will raise questions about American leadership and hurt the country's geopolitical standing.
"It will be a more dangerous world if the United States shows itself again unable to participate in international organizations in a full way and unwilling to support global trade agreements that it initiated," the former economic adviser to President Barack Obama told CNBC.
Turning to CVS' purchase of Target's pharmacies, Hutchinson called it "a smart move."
"This is an aging population and the need for healthcare that's more convenient, easier access, different than it's been is not going to go away," he said.
About Tom Hutchinson
Tom Hutchinson is a member of the Newsmax Financial Brain Trust. Click Here
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