June 24, 2015
With all the attention on Capitol Hill, some perspective is needed on the endgame.
Much of the commentary on the Trans-Pacific Partnership (TPP) in recent weeks has understandably focused on the U.S. Congress, where the Obama administration has been working hard to get the necessary votes to pass Trade Promotion Authority (TPA), also known as “fast-track.” But even as we wait to see whether Washington can get its act together on TPP, a mammoth free trade agreement which represents nearly 40 percent of global GDP, it is also important to remember what it will take for all twelve TPP countries – not just the United States legislature – to get the agreement past the finish line.
Congress’ approval of TPA will of course be an essential step to get things through. TPA is important because it would effectively ensure that Congress can only have an up-or-down vote on the pact, rather than opening up and amending specific provisions which could delay or kill the deal. But beyond Washington, securing TPA is also important for the other 11 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – as well. This is not just a question of American credibility, which Singapore’s foreign minister K Shanmugam emphasized quite starkly during his visit to Washington last week. Some of these countries had understandably been waiting to see if TPA will be approved to lock in what has been agreed to so far before buckling down for the final stretch of negotiations.
TPA now looks set to pass, although it is still not yet finalized. As The Diplomat reported earlier today, the U.S. Senate got the necessary votes to move standalone Trade Promotion Authority (TPA) to a final debate, days after the House passed standalone legislation on TPA on its side. Provided a final vote is cast and other outstanding issues – including Trade Adjustment Assistance – are ideally sorted out, TPA can then be approved, granting the Obama administration the ability to negotiate TPP without legislative amendment.
But that’s just the beginning of the end. Though the negotiating countries have said that they have gotten through most of the tough issues, the final stage of trade negotiations also tends to be a time to sort out lingering divergences, stubborn demands and knotty issues. Even though the specifics of the agreement are still secret, we do know that while technical matters have mostly been resolved, there are still some pending issues to be negotiated between TPP members.
Much attention of late has been paid to the rather optimistic recent comment by Australian Trade Minister Andrew Robb that the parties are “literally one week away” from completing the deal. Yet looking beyond deadlines, the bigger question is what kind of issues need to be worked out and at what level. At a Tuesday event on the TPP at the Atlantic Council, a Washington, D.C.-based think tank, Chile’s ambassador to the United States Juan Gabriel Valdes said that while some issues were simple and could be resolved quickly, others were not so and would require high-level attention from leaders. “I have the impression that political leaders will have to get involved in the process,” Valdes said.
Last but not least, all 12 TPP members will need to get the agreement ratified by their legislatures. This is no small feat. In some of the negotiating countries, like Malaysia, there is strong opposition to specific issues, as might be expected in a 29-chapter agreement that takes on sensitive issues like intellectual property and state-owned enterprises. Others, like Peru, are also at sensitive stages in their electoral cycles as well, just like Washington is with elections coming up next year in 2016. “Getting the actual TPP once it is finalized through our own congresses is not going to be easy,” Peru’s ambassador to the United States Luis Miguel Castilla warned at the Atlantic Council event.
In the United States, too, much work remains to be done with the elections fast approaching. Even given the ideal scenario where every step of the process is completed at its earliest date – with TPA becoming law by the end of June, TPP concluded by the end of July, and U.S. President Barack Obama signing the deal after November 1 following necessary procedures – including notifying Congress and making other preparations – TPP would only be implemented by December 1, Daniel Ikenson of the CATO Institute opined in a recent commentary. A more realistic scenario which adds in time for debates in Congress and other delays, Ikenson says, is between May and July 2016. The assumption that TPP will take a month to finalize the TPP is also an optimistic one, and it could in fact take longer. If it takes too long, that begins to bump up against the 2016 elections in November which could affect the vote count once it gets back to Congress.
With so much still left to do by so many players, a little perspective is in order even if we do see further advances on the TPP in Washington in the coming weeks. As Ambassador Castilla aptly put it, for all the attention on Capitol Hill over the past few weeks on TPA, “this is just Round 1” on the TPP.
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