Around the Globe, Opposition to Obama’s Sweeping Pacific Trade Deal Is Lining Up
The release of the text of the Trans-Pacific Partnership has critics lining up to try to bring it down.
President Barack Obama finally unveiled the text of the Trans-Pacific Partnership this week, giving the public a first view of the massive trade deal that covers 40 percent of the world’s economy and was negotiated in secret for the last five years. If it is approved by the U.S. Congress and lawmakers in 11 other nations, it would lower tariffs on everything from cars to agricultural products to TVs. But not everyone is pleased with the final outcome of the deal, and its passage is no sure thing.
Under the terms of the fast-track authority Obama won in June — which allows him to push trade deals through quickly — Congress has 90 days to review TPP. That same authority also allows a vote on the bill without amendments or threat of filibuster.
“The TPP means that America will write the rules of the road in the 21st century,” Obama said in a statement. “If we don’t pass this agreement — if America doesn’t write those rules — then countries like China will.”
But the president’s sell will be a tough one: Conservative factions of the Republican Party and the more liberal elements of Obama’s own party are opposed to the deal. To win fast-track power, he had to team up with Republican leadership in both the House and Senate to turn back a revolt led by House Democratic leader Nancy Pelosi, who typically is a staunch Obama ally.
Democratic presidential front-runner Hillary Clinton — who once supported the deal — now opposes it. So does GOP presidential leader Donald Trump; his emerging rival, Ben Carson, has said that more input from the American people is needed. Vermont Sen. Bernie Sanders, an independent challenging Clinton in the Democratic primary, is one of the most forceful voices against TPP.
“This trade deal would make it easier for corporations to shut down more factories in the U.S. and ship more jobs to Vietnam and Malaysia where workers are paid pennies an hour,” he said Thursday. “I will do everything I can to defeat the TPP.”
Lawmakers could also gum up the legislative process surrounding the bill. If so, they could push a final decision on the deal past Obama’s time in office, robbing him of his signature trade accomplishment. Speaking Friday at the U.S. Chamber of Commerce, powerful Utah Republican Sen. Orrin Hatch hinted at this strategy, saying, “At the end of the day, the alternative to renegotiation may very well be no TPP at all.” He added, “A lot of people on something this important do not want to have it passed or rejected by a lame duck Congress.”
Senate Majority Leader Mitch McConnell (R-Ky.) championed the deal earlier this year. However, when it was announced last month, he was more measured, saying there are “a number of troubling parts” of TPP that deal with warnings on U.S. tobacco. McConnell has yet to publicly comment since the text of the agreement was released Thursday.
Before he became House speaker, Rep. Paul Ryan (R-Wis.) was an enthusiastic supporter of the deal. Now that he’s second in line to the presidency, Ryan has tweaked his tune, saying Thursday: “Enactment of TPP is going to require the administration to fully explain the benefits of this agreement and what it will mean for American families. But I remain hopeful that our negotiators reached an agreement that the House can support.”
The signatories on the deal are Brunei, Chile, New Zealand, Singapore, Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam. Further complicating TPP’s future, there’s no guarantee many of those countries would approve the deal without a fight. There’s strong opposition to it in Canada and New Zealand, for instance.
The 30-chapter agreement is thousands of pages long, and it knocks down barriers to free trade in Pacific Rim nations. It reduces tariffs on a broad array of goods and services, like dairy, beef, milk, and cheese. It does the same for clothes, electronics, and seafood. According to the White House, the deal eliminates 18,000 taxes other member nations put on American goods.
In addition, the 12 nations agreed to curb cybertheft of trade secrets. A side agreement to TPP reaffirms member nations’ pledges through the International Monetary Fund not to cheapen currencies for competitive advantages; some U.S. lawmakers wanted TPP to actively punish currency manipulators. It’s the first time this kind of currency agreement comes alongside a trade deal. Also, TPP sets up an investor-state dispute settlement mechanism, a forum for corporations and governments to settle trade disputes with one another.
The deal also includes guarantees of labor rights, something that could radically alter workers’ lives in countries across Asia, where employees often are subject to harsh working conditions. Brunei, Malaysia, and Vietnam have pledged to allow their workers to form labor unions under a side agreement to TPP, as well as improve foreign worker protections.
One sticking point is likely to be about medicines. Right now, in the United States, drug companies get 12-year exclusivity on data related to new medicines. This allows them to keep generics off the market for more than a decade. Big Pharma argues this is necessary to recoup the cost of developing new drugs. None of that changes under TPP.
But exclusivity periods for many other TPP nations will change. Previously, many countries had no exclusivity, meaning their drug companies could quickly create cheaper, generic versions of medicines that are developed by rivals.
Under TPP, the exclusivity period in these countries is now between five and eight years. U.S. pharmaceutical companies view any change to patent protection and data exclusivity as “all in the wrong direction,” Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics, told Foreign Policy.
Decreasing drug data exclusivity is like “killing the goose that lays the golden egg,” added former Rep. Jim Kolbe (R-Ariz.), now a development expert at the German Marshall Fund. Foreign drug companies are “going to find it very difficult to get return on investments with only a five-year protection,” he said.
However, it could be a good thing for American drugmakers. Generic drugmakers will now have to wait five to eight years before they can copy the products of their larger competitors. That means the more expensive, original drugs would stay on the market longer.
This is something medical advocates oppose. The text of the deal confirms TPP “will further delay price-lowering generic competition by extending and strengthening monopoly market protections for pharmaceutical companies,” Judit Rius Sanjuan, a U.S. manager and legal policy advisor for Doctors Without Borders, said in a statement.
Environmental groups, which have long opposed TPP, are also disappointed in the final product. The deal does contain some regulations meant to curb overfishing and deforestation, but the words “climate change” don’t appear once in the thousands of pages that comprise the deal. In a statement Thursday, 350.org, an international environmental organization, called it “just as toxic a deal for the climate as expected.”
Another word that is conspicuously absent from the text is China. TPP is widely acknowledged as an economic power play by the White House in China’s neighborhood. Earlier this week, in an interview with Russia’s Mir TV channel, Secretary of State John Kerry invited not only China, but also Russia, to join the deal — but only “as long as they want to raise the standards and live up to the highest standards of protecting people and doing business openly and transparently and accountably.”
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