Obama Is At Risk of Seeing His Signature Trade Deal Slip Through His Fingers
If TPP talks stall, Obama might not get to use the fast track trade authority he fought for.
President Barack Obama insists the Trans-Pacific Partnership, or TPP, the massive trade deal between the United States and 11 other nations meant to bolster trade with Asia, is necessary to keep the United States competitive in the global economy. But barring a breakthrough in negotiations that appear to be at an impasse, he might not be in office to see it completed.
As negotiators meet in Atlanta this week, talks are stalled on two key issues: auto and dairy. Canadian farmers don’t want to open their protected dairy industry to international competitors, even as Canadian Prime Minister Stephen Harper pushes to get the deal through ahead of October 19 election. Farmers in New Zealand are also opposed to opening their market to foreign competitors. Their agricultural trade envoy, Mike Petersen, told Radio New Zealand Tuesday that no progress has been made on that front. On cars, Japan, Mexico, and the United States are all reluctant to open their markets to more foreign competition.
The standoff brings American politics into the trade deal. Congress has 90 days to review any agreement. That means if a deal can’t be finalized this week — it’s been negotiated for years — that review of would likely be pushed to the spring.
According to Daniel Twining, a senior fellow for Asia at the German Marshall Fund, this could then delay the deal until 2017, after Obama leaves office, because Congress has the ability to prolong the legislative process surrounding the bill.
“The timing is bad,” Twining told FP Thursday. “If it gets pushed to the spring, it would not fare very well in the American political debate.”
The argument over the deal, which covers 40 percent of the global economy and would be one of the largest in the history of the United States, would take place at two levels: on the presidential campaign, and in the halls of Congress. Bernie Sanders, the Independent senator from Vermont who is running as a Democrat, is against TPP. Hillary Clinton, the Democratic frontrunner, has spoken out against the deal. When she served as secretary of state , Clinton said she backed it.
Her refusal to repeat that support is politically motivated: organized labor, a key component of the Democratic base, is staunchly opposed to it, something Clinton acknowledged in June.
“No president would be a tougher negotiator on behalf of American workers, with trading partners or on Capitol Hill than I would be,” Clinton said in June. She later added, “any trade agreement is going to be fraught with all sorts of problems.”
But the real fight over TPP will take place in Congress. In June, when the president was pushing for fast-track trade authority he ultimately received, he faced dissent in his own party, including from House Minority Leader Nancy Pelosi of California, a longtime ally. She teamed up with Tea Party Republicans in an attempt to derail Obama’s trade agenda.
The president triumphed by partnering with House Speaker John Boehner of Ohio and Senate Majority Leader Mitch McConnell of Kentucky, who pushed fast-track authority through. This time around, Boehner won’t be there — he retires at the end of the month — and it remains to be seen if the next speaker will back the deal. House Majority Leader Kevin McCarthy of California, the favorite to replace Boehner, supported fast track authority in June, but will now have to answer to the far-right of his party, which opposed it.
And even if the next speaker does, lawmakers opposed to TPP could slow the legislative process surrounding it with debate and procedural moves, just as they did last summer. To stop Obama, Pelosi threatened to kill a worker’s assistance program Democrats love before admitting defeat less than two weeks later.
“The window is certainly closing,” Cathleen Cimino-Isaacs, a research associate at the Peterson Institute for International Economics, told FP. “There’s the potential for Congress to throw a wrench into the system to slow this down.”
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