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Obama trade setbacks undercut gains in South-east Asian ties

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When President Barack Obama envisioned making his final visit to South-east Asia as leader, he probably imagined being able to promote the sealing of a massive US-led Pacific trade pact.

[WASHINGTON] When President Barack Obama envisioned making his final visit to South-east Asia as leader, he probably imagined being able to promote the sealing of a massive US-led Pacific trade pact.

The reality is Mr Obama arrived late Monday in Laos amid doubts on whether the 12-nation Trans-Pacific Partnership will even get through Congress, let alone be implemented, given the protectionist mood in the US election year.

Meanwhile, despite Mr Obama's much-touted military and economic rebalancing to Asia, which has included a more visible naval presence, China's military is increasingly active in the disputed South China Sea and the country more economically intertwined with the region, promising hundreds of millions of dollars for infrastructure and other investment.

The current bright spot in Mr Obama's pivot is the fact he's the first president to visit Laos, a small, landlocked South-east Asian nation that the US had largely forgotten since the end of the Vietnam War more than 40 years ago. 

At an ornate welcome lunch for world leaders on Tuesday, Mr Obama said he hoped a "new partnership will mean greater progress and opportunity for the people of Laos."

The White House announced Tuesday the US will give US$90 million to help clear unexploded ordnance in Laos. The country bears the scars of fighting from the Vietnam War, skirmishes that at the time were barely acknowledged because the conflict was said to only be in Vietnam, which Mr Obama visited in May.

"We should help," Mr Obama said at a briefing Monday before arriving in Vientiane. The aid, he said, "ensures that innocent kids who are running through a field, or a farmer that's trying to clear a field, or a business that's trying to get set up - that they're not endangered by the possibility of an explosion."

Mr Obama's trip to Laos "sends a message about where the US is gaining influence in the region," Brett Bruen, president of the Global Situation Room consulting firm, said of Mr Obama's presence in Laos.

"While it may be a small country, it also can be an indicator of how the US is hopefully on a trajectory to strengthen its relations not only with Laos but with the region more broadly."

Rather than being the architect of a lasting trade agreement covering 40 per cent of the world's economy, the legacy of Mr Obama's pivot to Asia may be a warmer reception and more open relationship with South-east Asian nations such as Laos that in recent decades have been more likely to cozy up with China than the US

Under Mr Obama's watch the US has secured greater access to Vietnam, both strategically and economically. It has renegotiated access for its military in the Philippines, and built a regular calendar of joint naval exercises with Southeast Asian nations. It flies surveillance flights over the South China Sea from planes that are maintained in Singapore.

But the behaviour of new Philippine president Rodrigo Duterte suggests potentially tricky times ahead. Mr Duterte has called out the US for its criticism of him over his war on drugs that has seen a spike in the shooting of suspected drug dealers.

On Monday, he said that Mr Obama will need to listen first and talk second during a meeting planned between the two leaders in Laos, warning that if Mr Obama questioned him "I will curse you in that forum."

Hours after those comments from Mr Duterte, the White House announced that Mr Obama had scrapped their meeting, which was scheduled for Tuesday. Mr Duterte later issued a statement expressing regret for his remarks.

Some South-east Asian nations have expressed concern about the fate of the TPP, warning it can't be renegotiated. Regional members include Singapore - Prime Minister Lee Hsien Loong said in a US visit last month that US credibility was on the line over the pact - Malaysia and Vietnam.

Economists have said Vietnam's emerging economy would be one of the biggest beneficiaries among TPP nations from its ratification and implementation.

Youth Leaders During his three-day trip, Mr Obama will visit the capital of Vientiane as well as the cultural jewel of Luang Prabang. Laos landed its spot on the president's final Asia itinerary because it's the site of the East Asia Summit and where he'll meet with leaders of the Association of Southeast Asian Nations, whom he hosted in California earlier this year.

He'll also speak with young leaders, continuing a focus on youth across Southeast Asia and other developing regions. Mr Obama hopes such a program endures after his presidency as a way of engendering support for democracy and human rights in parts of the world where leaders may not adhere to the same principles.

The president arrives in Laos following his stop in China for the G-20 summit. Mr Obama said in China the TPP remains his top trade priority and expressed hope he can still get it through Congress.

With a potential focus on human rights, Mr Obama brings a message to Laos akin to what he said in Vietnam - where he criticised his host's human rights record - and Myanmar, a country that has revamped relations with the US and that Mr Obama has visited twice in its shift toward democracy.

"It's useful to see what's happened in the evolution of our relationship with Vietnam," Mr Obama said Monday at a briefing in Hangzhou, China.

"At the outset when we're trying to build trust, a lot of work can be done around war legacy issues."

South-east Asian nations may not take too kindly to Mr Obama calling them out on human rights. And the US faces a challenge in countries like Myanmar, Laos and Cambodia to displace China's influence.

While Myanmar's defacto leader Aung San Suu Kyi will visit the US later this month, she just made a trip to China where she spoke of her desire for ties to be "further consolidated and developed."

Still, "this trip is an opportunity for the president to cement his legacy," said Mr Bruen, who worked as director of global engagement in Mr Obama's White House National Security Council.

"It's not one that necessarily has achieved all that some hoped it might in his presidency. But there are certainly some important accomplishments, and he's going to hold those up."

Michael Green, senior vice president for Asia at the Centre for Strategic and International Studies, noted that every president has made Asia a priority since Richard Nixon opened US-China ties.

But Mr Green, a former George W Bush administration National Security Council senior Asia official, said "filling in the South-east Asia piece" is Mr Obama's hallmark.

"Historians will probably say if they look closely at the rebalance or pivot that the most significant legacy for the president is going to be engagement with Southeast Asia," Mr Green said before the trip.

"This is probably the most deliberate and sustained engagement with South-east Asia since the Vietnam War."

BLOOMBERG