TPP Timeline in Focus as Obama Signs Trade Promotion Authority into Law

2 July 2015

US President Barack Obama signed Trade Promotion Authority (TPA) into law on Monday, putting an end to the months-long drama in Washington over the controversial legislation’s fate. With the TPA debate now in the rear-view mirror, the focus has now turned to the potential timeline for wrapping up the Trans-Pacific Partnership (TPP) talks.

“This legislation will help turn global trade – which can often be a race to the bottom – into a race to the top,” Obama said in signing the bill. “It will reinforce America’s leadership role in the world -– in Asia, and in Europe, and beyond.  If I didn’t believe it, I wouldn’t have fought so hard to get these things done.”

The US President also signed into law a separate piece of legislation renewing both a support scheme for domestic workers displaced by trade, as well as various US preference programmes, such as the African Growth and Opportunity Act (AGOA) and the Generalized System  of Preferences (GSP).

TPA will now be in place for at least three years, with the possibility of a three-year extension. Both chambers of Congress had approved these various trade bills earlier in June, after a prolonged and bitter fight among lawmakers that brought many of the US public’s anxieties over the effects and transparency of trade deals – past and present – to the fore. (See Bridges Weekly, 25 June 2015)

Obama: “tough negotiations” ahead

While the TPA battle is now over, this has been widely recognised as just the first stage of a more difficult fight – that of bringing the 12-country TPP talks to the finish line before the end of the year.

The proposed trade deal, whose members account for 40 percent of global GDP, has drawn controversy across the various countries involved in the talks, both over the potential content in areas such as intellectual property rights and environmental and labour protections, as well as over the level of transparency in the negotiations.

Obama openly acknowledged some of the difficulties ahead in his remarks on Monday. “The trade authorisation that’s provided here is not the actual trade agreements.  So we still have some tough negotiations that are going to be taking place,” he said.

Nor would the debate on trade come to a close, he added, while voicing his confidence that the trade deals that will be subject to TPA will “improve the system of trade that we have right now.”

Timing, possible roadblocks

Since the news of TPA’s passage, Japanese Economy Minister Akira Amari has been among those to suggest that ministers from the 12 TPP countries could meet as early as this month to reach a broad deal.

Some TPP officials, such as Australian Trade Minister Andrew Robb, have suggested that the 12-country trade talks could be wrapped up in a week once TPA is in place in the US. (See Bridges Weekly, 25 June 2015)

No date has yet been confirmed for either chief negotiators’ meetings or a ministerial-level gathering, which would both be expected before a final agreement is confirmed, though some reports have indicated that a ministerial might be held this month. Contact has reportedly begun among TPP officials to begin whittling down the remaining areas of disagreement as much as possible before such high-level meetings are convened.

US Trade Representative Michael Froman suggested at a Politico-hosted event on Wednesday that a deal could be ready in time for Congress to ratify it this year. That would require a quick conclusion of the talks, given requirements under the new TPA legislation regarding how long the completed text must be public before Obama signs it and submits it to Congress for ratification.

Yet how many issues remain beforehand, and how difficult these are to resolve, is still unclear. For one, the US and Japan have yet to announce a bilateral agreement on automobiles and agricultural market access, including rice – areas that have been blamed for slowing down the overall TPP talks.

While progress had been reported between the two sides prior to the TPA situation, where they currently stand – and how far apart they remain – is still unclear, though some officials have been quoted as saying that a bilateral deal could be announced in July.

Disagreements also remain between and Canada and other TPP partners, particularly the US and New Zealand, on agriculture. Dairy and poultry have been particular sticking points, given Canada’s supply management system.

This scheme relies on the use of “marketing boards” which both control domestic production of such farm goods, as well as requires high tariffs on importing these products from abroad.

New Zealand Trade Minister Tim Groser has pegged the dairy issue as a priority for his country, warning that if Canada does not offer a better deal, “we won’t be signing what’s on the table at the moment,” in comments reported by Reuters.

Tom Mulcair, as the leader of the New Democratic Party (NPD), the main Canadian opposition party, has called on Prime Minister Stephen Harper to protect the supply management system “in its entirety.”

Dairy Farmers of Canada, an industry group, said in May that it continues to back Ottawa’s stance in the TPP talks, noting that “the claim that supply managed commodities are protectionist is unfounded” and suggesting that other markets, including that of the US, provide even less access.

Should a TPP deal indeed be reached in July, as these officials have predicted, the next major hurdle would be getting domestic legislatures to approve the final agreement.

While the US is headed into a general election year in 2016 – with the White House guaranteed to see a new president the year after, given US term limits – other TPP countries such as Peru and Canada are also set to go to the polls, ensuring an already difficult political climate for passing the agreement.

Yet some officials have expressed confidence that the final agreement will be approved by domestic lawmakers. “I think the likelihood is pretty high that [the US] Congress will pass it,” Froman said on Wednesday, in comments reported by Reuters.

The members of the TPP negotiations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.

ICTSD reporting; “U.S. trade representative sees Pacific trade pact before Congress by year-end,” REUTERS, 1 July 2015; “Japan, U.S. can reach agreement for July pan-Pacific trade deal: Japan official,” REUTERS, 26 June 2015; “Pacific trade talks enter ‘fast and furious’ phase,” REUTERS, 25 June 2015; “Mulcair urges Harper to defend supply management during TPP negotiations,” GLOBAL NEWS, 29 June 2015.

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