With Europe at the fore, it seems hard to justify paying attention to a congressional hearing about a trade deal nobody’s ever heard of.  But the most important trade agreement in a generation—the Trans-Pacific Partnership (TPP), the subject of a House Ways and Means Committee hearing yesterday—is quietly advancing.  The pact, a free-trade deal including the US and several other Pacific Rim nations, will profoundly affect economic and security relations between the US and Asia.  And it may ultimately reshape global economics.

Negotiations are only starting, and with Japan just joining the talks they could go on for years.  The true significance of TPP lies in what it promises: a new type of broad alliance for a world where trade and investment issues are no longer separate, and together underpin a new geopolitical reality.  It’s the first of what could be many “coalitions of the willing” to unlock economic and financial efficiency.  And if works, it will act as a magnet to pull many more countries into its fold.

TPP’s emergence follows nearly a decade of disappointment in trade talks.  The World Trade Organization’s (WTO) Doha Development Round of talks first collapsed in 2003 and effectively died with the financial crisis.  Doha’s moribund state is a direct result of the massive changes in the international economic system that the crisis brought to the fore. Now there is a new approach for trade and investment negotiations.

The WTO and global trade talks under its auspices are built on a divide between developed and developing economies.  With developing countries’ increasing economic clout, this divide no longer makes sense.  China, the world’s second-largest economy, is a developing country.  So are Brazil (seventh), India (ninth), Mexico (fourteenth), Turkey (seventeenth), and Indonesia (eighteenth)—and these and their developing peers’ share of global economic activity is growing dramatically.  The breakdown of the dichotomy between developed and developing economies—with developed countries loath to grant powerful developing economies their traditional advantages, and developing countries equally loath to relinquish them—torpedoed Doha.

No less fatal to Doha were the changes in global finance.  In yesterday’s world, developed countries were assumed to be mature and less risky, dispensing aid to emerging markets and shepherding developing countries into the international economic regime in exchange for major concessions.  That seems almost quaint today, when French President Nicolas Sarkozy goes to China with his hat in hand to ask for help rescuing the Eurozone, IMF intervention in Europe requires Brazilian funding, and the preferential treatment of companies and investments by developing economies is a core global issue.

The death of Doha and the rise of TPP mark an inflection point for global economic negotiations. For the first time since the modern trading regime took shape in 1947, a negotiating round collapsed.  Continuing shifts of power in the world economy and the increasing convergence of trade and finance make another WTO-wide round impossible to conclude, even if no one is willing to declare failure.

As power struggles stymied Doha, countries turned to bilateral deals. In Asia alone, 51 FTAs were inked from 2000 to 2009, with another 78 under negotiation.  Yet complex webs of small deals are extremely inefficient over the long term. With each FTA establishing different standards, businesses and governments lose the economies of scale that ambitious trade pacts bring.

By David Gordon and Sean West The opinions expressed are their own.

There’s a good reason that only paid staffers and blood relatives seem to approve of Congress, as Senator John McCain recently quipped. But it is not the simple reason that Congress continues to fail, as witnessed in the implosion of the supercommittee. Rather it’s that Congress continuously promises unachievable historic fixes when it should instead be focused on slow progress.

There’s nothing wrong with small-scale fixes when they are the best achievable outcome. Congress is hyperpolarized and both sides are fighting for a mandate to reform the entire economy in line with their competing visions. As underwhelming as the August debt limit deal was, in the current political environment, saving over $2 trillion one way or another was a positive result. The fact that Congress could agree to something this large this year is actually quite stunning.

Failure – and the ensuing loss of respect in the eyes of voters – is largely due to leaders on both sides pretending that massive overhauls are in reach when they clearly aren’t. The problem is that Congress isn’t content to just do its job — it can’t help itself but to overpromise and then underdeliver.

During the debt limit debate, voters were treated to a roller coaster ride of epic proportions: One day Congress was going to cut $4 trillion from the debt, the next day the US government was going to default. In March, Congress was going to let the government shut down unless historic spending cuts were put in place. Both situations were manufactured crises that were created with the promise of forcing historic fixes. Neither did.

The supercommittee demonstrates the danger of playing this game. Members spent way too much time pretending they were going to do something historic — trading $3 trillion plans back and forth — instead of simply working on the $1.2 trillion task before them. Failing to reach $1.2 trillion looks that much worse to the public because Congress continuously talked about achieving much broader taxation and entitlement reform.

Neither party has full control of the political process and neither has an incentive to secure a big deal so close to a presidential election, so when the crisis has real consequences (like a shutdown of the government or default) they come together for modestly-sized deals amid dire political circumstances. At the end of the day for the supercommittee, sequestration thirteen months in the future was not a big enough threat to force an agreement.