Deal Reached In Trans-Pacific Partnership

Matt Vespa
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Posted: Oct 05, 2015 7:40 PM
Deal Reached In Trans-Pacific Partnership

Douglas Holtz-Eakin of American Action Forum noted this morning that the clock was ticking on the Trans-Pacific Partnership (TPP), as no one wants to be dealing with this when election season gets going.  The deal is projected to add $80 billion in national income, with an additional $125 billion in exports. The trade deal, which involved 40 percent of the world’s economy, apparently reached an agreement in Atlanta after days of negotiations.

According to The New York Times, the deal would gradually eliminate thousands of trade tariffs, establish rules for intellectual property, expand Internet rights, curb wildlife trafficking, and protect against environmental abuses. Nevertheless, President Obama still faces an uphill battle in Congress, where anti-trade Democrats and Tea Party Republicans refuse to support the deal for various reasons. Democrats think that the agreement will further gut American jobs for working class Americans, while conservatives don’t want to give any more power to Obama–and also have taken a more populist tone on trade. As for progressives, they’re skeptical that this agreement would improve labor conditions and protect the environment:

The Pacific accord would phase out thousands of import tariffs as well as other barriers to international trade. It also would establish uniform rules on corporations’ intellectual property, open the Internet even in communist Vietnam and crack down on wildlife trafficking and environmental abuses.

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Several potentially deal-breaking disputes had kept the 12 trade ministers talking through the weekend and forced them repeatedly to reschedule the promised Sunday announcement of the deal into the evening and beyond. Final compromises covered commercial protections for drug makers’ advanced medicines, more open markets for dairy products and sugar, and a slow phaseout — over two to three decades — of the tariffs on Japan’s autos sold in North America.

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The Office of the United States Trade Representative said the partnership eventually would end more than 18,000 tariffs that the participating countries have placed on United States exports, including autos, machinery, information technology and consumer goods, chemicals and agricultural products ranging from avocados in California to wheat, pork and beef from the Plains states.

Japan’s other barriers, like regulations and design criteria that effectively keep out American-made cars and light trucks, would come down.

While many opponents say the trade pact will kill jobs or send them overseas, the administration contends that the United States has more to gain from freer trade with the Pacific nations. Eighty percent of those nations’ exports to the United States are already duty-free, officials say, while American products face assorted barriers in those countries that would end.

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The accord for the first time would require state-owned businesses like those in Vietnam and Malaysia to comply with commercial trade rules and labor and environmental standards…

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Unions and human rights groups have been skeptical at best that Vietnam, Malaysia and Brunei will improve labor conditions, or that Malaysia will stop human trafficking of poor workers from Myanmar and Southeast Asia. The United States reached separate agreements with the three nations on enforcing labor standards, which would allow American tariffs to be restored if a nation is found in violation after a dispute-settlement process.

There are a few concessions. The article noted that the agreement isn’t as tough on currency manipulation, which is why the Ford Motor Company is against TPP in its current form. Additionally, Sen. Orrin Hatch (R-UT) said he would withdraw his support for TPP if the current provision that reduces the time in which brand-name pharmaceuticals can keep their biologics data secret is cut. Biologics are medicines derived from living things–and American pharmaceutical companies have a 12-year window to keep that information private.

If the fight over Trade Promotional Authority (aka “fast track”) and Trade Adjustment Assistance (a program that helps workers whose jobs might be affected by free trade) are any indicators, then the final passage of the Trans-Pacific Partnership will probably go down as one of the most difficult pieces of legislation for Obama to get pass Congress since Obamacare.  For starters, 151 members of the House Democratic Caucus is against TPP.

Fast track authority was critical for Obama, as it assures the other nations that America would speed up the approval process, giving an up-or-down vote on whatever agreement is in question. No filibuster or amendments can be logrolled into the agreement if this authority is granted.

Obama got this authority, but only after a stinging defeat at the hands of his own party over TAA. The president signaled that he wouldn’t sign off on TPA without the TAA provision. Being that TPA/TAA was a packaged deal in its initial form, the Democrats torpedoing the TAA provision stopped any advance on Obama’s trade agenda. Congress then voted on TPA and TAA separately, which was successful. When TPA passed, there was no reason for Democrats to use TAA, as leverage.

The initial debate about TPP saw Obama going head-to-head against some prominent members of his own party, getting involved in intra-party squabbles that he normally stayed out of for most of his presidency. 

TPP involves the United States, Peru, Japan, Singapore, Australia, Malaysia, Vietnam, Brunei, New Zealand, Chile, Canada, and Mexico.