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Inconclusive Congress vote leaves TPP in limbo

Trading partners view the setback more with resignation than panic.


June 15, 2015
by ASSOCIATED PRESS

TOKYO — How slow can you go? The effort to get US trade legislation through Congress, clearing the way for progress on an Asia-Pacific trade accord, is in limbo once again.

The US House of Representatives on June 12 shot down a proposal to give President Barack Obama authority to negotiate global trade deals for congressional approval or rejection, without amendments.

Among US trading partners that are negotiating the Trans-Pacific Partnership or TPP, the setback was viewed more with resignation than panic.

Supporters of the trade pact say “fast track authority” is needed to give the US and other countries a chance to help fashion rules for trade in the 21st century. Critics object to confidentiality requirements that keep the negotiations secret and view the overall agenda as too aligned with the interests of big business.

House lawmakers approved trade negotiating power for the president, 219-211. But they rejected a proposal to renew federal aid for workers who lose their jobs due to imports, by a vote of 302-126. Rules required that the House approve both parts of the legislation, previously approved by the Senate, so the “No” vote meant defeat for the overall package, a decision that could be overcome after further congressional manoeuvrings.

Trade officials in Japan and Australia reacted to the defeat of the Trade Promotion Authority by saying that without it, the effort to forge the 12-nation trade pact was unlikely to succeed.

“Congress puts Obama’s TPP on ice,” read a front-page headline in the Yomiuri newspaper.

“Voting results are very tricky,” it and other local media quoted the TPP minister, Akira Amari, as saying.

Amari said it was unlikely that the 12 countries negotiating the trade pact would manage to hold ministerial-level meetings before the end of this month as originally planned.

Trade Promotion Authority legislation ran into a similar hurdle in the US Senate, but eventually passed, so the Congressional vote could be just a temporary setback.

But it adds to the constant delays that could prevent Obama from getting a final trade pact agreement with the 11 other nations participating before the US-side becomes too embroiled in campaigning for the 2016 elections.

Any change to the bill in the US House would require Senate reconsideration of the legislation, slowing the process further.

“But, for the White House and business community, delay is better than defeat,” said Richard Katz of the Oriental Economist Report.

“We are not predicting that TPA will pass the House. That vote is still too close to call. What we are saying is that it’s too early to start putting nails in the coffin,” he said in a commentary.

The Trans-Pacific Partnership began as a smaller trade grouping but was launched as a wider regional initiative in 2011. Since then, informal deadlines for an agreement have repeatedly fallen by the wayside and countries haggled over the standards it will set and over trade agreements between individual countries.

Still, Australia’s trade minister, Andrew Robb, said he was optimistic the countries involved in the trade talks can reach an agreement.

“There is another opportunity next week to get the ducks lined up,” he said on June 13. “There is always a lot of cut and thrust in these things and politics being played.”

The negotiations, intended to eventually create a region-wide free-trade area, involve Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Other difficulties include disagreements over market opening requirements for certain industries such as farming, handling of disputes, reforms of state-run industries and more rigorous protection of intellectual property such as patents and trademarks.

China, as the world’s second-largest economy and a major trading partner of most countries in the region, is not involved in the trade pact talks.

Its official Xinhua News Agency observed after the vote that most participants in the negotiations are reluctant to make any politically costly changes until Obama gains fast-track authority.

Asked during a routine briefing on Friday if the Trans-Pacific Partnership initiative is an effort to “contain” China, slowing its ascendance as a regional power, Foreign Ministry spokesman Hong Lei reiterated Beijing’s calls for trade rules that allow for diversity.

“China would like to actively engage in building a regional co-operation framework with regional countries which is open, inclusive, balanced and in favour of shared interests, pushing ahead with regional economic integration,” Hong said.
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