CQ TODAY ONLINE NEWS – TRADE
Nov. 13, 2011 – 10:05 p.m.
Pacific Rim Trade Negotiations Get a Boost, Even as Questions Persist
By Ben Weyl and Joseph J. Schatz, CQ Staff
With bilateral trade deals from the presidency of George W. Bush no longer in his rearview mirror, President Obama is shifting his commercial focus to the Pacific and an emerging trade pact that bears only his fingerprints.
A trade policy summit in Hawaii concluded with the Obama administration claiming progress in negotiations toward a regional trade pact known as the Trans-Pacific Partnership (TPP).
Yet, crucial questions remain unanswered, particularly given that the TPP is the first pact that Obama will shape from the ground up. It has drawn scrutiny from business groups and unions, as well as lawmakers, all eager to shape the nascent trade alliance.
This past weekend in Honolulu, the United States hosted the Asia-Pacific Economic Cooperation summit, a forum designed to foster expanded trade and investment throughout the region. The annual conference is often criticized for not producing concrete results, but many saw this year’s event as an opportunity to advance negotiations on the TPP.
The Pacific Rim pact began taking shape in 2005 with an agreement among four countries: Singapore, New Zealand, Brunei and Chile. The United States did not announce its intention to join until the waning months of the Bush administration. Participants now also include Vietnam, Peru, Australia and Malaysia, and Japan announced at the summit that it would seek to join the negotiations.
There is a definite strategic element to the talks: establishing a counterweight to China’s economic might in Asia. And the Obama administration views the TPP as an opportunity to establish a 21st-century trade agreement designed for the fast-changing global economy. But that means different things to different people.
To service industry companies, such as FedEx Corp., it means breaking down regulatory barriers and increasing the efficiency of complex global supply chains, issues these companies have had little success addressing in global trade talks. Internet and technology companies want the TPP to deal with intellectual property violations. Labor unions, environmental groups and their advocates in Congress take it to mean strengthening labor standards in the region.
The prospect that the United States might relax trade constraints with countries that are seen as major manufacturing competitors has raised hackles with U.S. lawmakers from economically struggling and union-friendly areas in the Rust Belt — states and districts that are crucial to Obama’s re-election effort next year.
With Japan appearing set to enter talks to join the pact, Sen.
“Before joining negotiations, Japan must first demonstrate a sustained commitment to opening its market to U.S. automobiles and automobile parts,” Stabenow wrote in a letter. “Opening U.S. markets to more Japanese automobiles while Japan keeps its market closed to American automobiles simply does not make sense.”
In a letter to U.S. Trade Representative
“Japan’s inclusion would add dramatically new dimensions and complexities to the TPP negotiations,” wrote Sens.
Camp and Levin are both advocates for the Michigan auto industry.
Pacific Rim Trade Negotiations Get a Boost, Even as Questions Persist
‘The Next Phase’
The Obama administration’s trade policy has long frustrated the business community. Negotiated deals with South Korea (
Following months of delicate negotiations with congressional leaders, the Obama administration submitted the three agreements to Congress last month, and the House and Senate passed the implementing bills within days, with significant bipartisan support. Obama also won passage of a related Trade Adjustment Assistance measure (
While previewing the president’s trip last week, Ben Rhodes, the deputy national security adviser for strategic communications, called the Pacific Rim pact “the most promising vehicle that we see for achieving economic integration across the Asia-Pacific region and advancing U.S. interests with some of the fastest-growing economies in the world.”
“The TPP is really the next phase of the U.S. trade agenda, broadly and within this part of the world,” Rhodes said.
It is unclear, however, when negotiations might conclude and how Obama might push passage of any resulting agreement. That is in no small part because Obama does not currently possess so-called fast-track trade negotiating authority, which allows for expedited congressional consideration of trade agreements — and gives foreign governments confidence that Congress cannot change a trade deal after the president has signed it.
The latest version of fast track, also called trade promotion authority, expired in 2007. The agreements with Colombia, Panama and South Korea were negotiated when fast-track procedures were in place, and were protected when they were sent to Congress for approval.
Under fast-track rules, a trade agreement must receive an up-or-down vote in both chambers, without amendment, within 90 days of being submitted by the White House. No trade agreement submitted under those procedures has ever been rejected.
GOP lawmakers have criticized Obama for not requesting renewal of that authority.
“I’m hoping that the president will agree this weekend to seek trade promotion authority, which is the necessary negotiating authority to come to a conclusion on the TPP, but also on any other trade-opening agreement,” said Sen.
In Hawaii, Thomas J. Donohue, president of the U.S. Chamber of Commerce, also called for granting Obama fast-track authority and urged swift completion of the TPP.
“The American business community wants and needs an ambitious TPP agreement completed as soon as possible,” Donohue said in prepared remarks last week.
At a chamber event last month, Donohue signaled he would push what appears to be a novel legal argument that the TPP should actually be covered under fast-track procedures since the rough agreement to proceed on the pact began years ago.
Pacific Rim Trade Negotiations Get a Boost, Even as Questions Persist
That line of reasoning is likely to conflict with the views of other trade experts, particularly those in the labor movement.
“Generally, we think fast track should not be granted until we know what is in the trade agreements to which it will apply,” said Amaya Tune, an AFL-CIO spokeswoman. “Otherwise, it is a danger because it ensures passage of a trade agreement, no matter what is in it.”
The AFL-CIO opposed all three pacts approved last month and has tended to resist expanded trade. One of the most likely reasons that Obama has not made reviving fast-track authority a priority is he does not want to anger a crucial ally ahead of the 2012 presidential election.
When asked by reporters when, in the long-term, the TPP would finally be put in place, Rhodes demurred. “I don’t want to put a date on it,” he said, saying that critical elements are still in negotiation. “I wouldn’t put a timeline on it.”