Business

TPP clock ticks as Congress dallies on trade authority

by Kakumi Kobayashi

Kyodo

Negotiations on a contested Pacific free trade pact have apparently hit a new snag — a U.S. legislative delay in bringing forward a bill viewed as crucial to concluding the deal.

Dashing earlier expectations, the U.S. Congress has yet to submit a bill that would grant what is called Trade Promotion Authority to President Barack Obama so he can sign trade deals like the Trans-Pacific Partnership without deep legislative scrutiny.

With the clock ticking to conclude the U.S.-led TPP later this year, the uncertainty about the trade bill has confounded trade officials from the United States, Japan and the 10 other negotiating countries, observers say.

On Sunday in Hawaii, the chief TPP negotiators wrapped up their weeklong talks without a breakthrough. The meeting had followed a round of talks in New York through early February that also made little progress.

They even failed to set a time frame for the next ministerial-level meeting on the pact, dealing a blow to the marathon talks, which began five years ago.

The other countries vying to enter the pact, which would cover some 40 percent of the global economy, are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

“We anticipate a delay from the scenario which we heard earlier,” Kenichiro Sasae, Japanese ambassador to the United States, told reporters Friday, in reference to a time frame for concluding the TPP.

The move to give the president so-called Trade Promotion Authority gathered steam in January when a new congressional session was launched with the Republicans — who generally support free trade — in control of both chambers following November’s mid-term elections.

The failure to legislate TPA has apparently discouraged the TPP participants from offering make-or-break concessions to the United States out of fear such proposals could be rejected by Congress.

Orrin Hatch, head of the Senate Finance Committee, which handles trade issues, indicated in January that his panel could begin debate on a TPA bill in February. But the Republican chairman of the panel admitted recently that members of his party have had difficulties narrowing gaps with Democrats over the bill and that debate is unlikely before April.

On Wednesday, the TPP-skeptic American Federation of Labor and Congress of Industrial Organizations, the largest U.S. federation of labor unions, said it will suspend financial contributions to federal lawmakers as a form of resistance to the pact.

Members of Congress involved in the TPP negotiations are facing “a significant amount of pressure” from opponents of the initiative, including the AFL-CIO, Sasae suggested.

Former Rep. Jane Harman said that despite what many pundits believe, it won’t be easy for the Republican-controlled Congress to pass a TPA bill.

“I do think that the anti-trade wing of the Republican Party and the anti-trade wing of the Democratic Party are going to band together,” said Harman, now president of the Woodrow Wilson International Center for Scholars think tank.

Harman joined many people involved in the TPP talks in warning that this year could effectively be the final deadline for striking a deal before the American public’s interest shifts to next year’s presidential election.

“If we don’t do it this year, TPP, or at least any role we play in TPP, I think is gone,” Harman said.

Mireya Solis, head of Japan studies at The Brookings Institution think tank, urged Congress to redouble its efforts to enact the TPA bill, saying the Obama administration’s key policy of focusing on Asia will stall if the TPP fails.

Failure to sign the TPP would demonstrate that the United States and Japan cannot move past friction “to work in areas such as internationalization of financial services, protection of intellectual property and governance of the Internet economy that are central to the 21st century economy,” Solis said.

The United States and Japan, which account for a combined 80 percent of the Pacific trade framework in terms of gross domestic product, have been at odds over market access and automotive trade.