Tough comments recently from Senate Majority Leader Mitch McConnell on the 12-nation Trans-Pacific Partnership Agreement and from two European leaders on the Transatlantic Trade and Investment Partnership all but signaled the delay and even possible death of both accords.
Still, the administration continues to beat the drum on both trade pacts, pointing to recent primary wins by pro-trade Democrats despite threats of defeat by anti-trade groups.
“We obviously will be working closely with leading Democrats and Republicans in the Congress to determine the most effective way to get that (TPP) done before the end of the year,” White House Press Press Secretary Josh Earnest said earlier this week. “But that’s a separate piece of work than continuing to negotiate with our (EU) partners overseas. So there’s no reason that work on one needs to prevent work on the other.”
Obama’s first stop is China. He will remain there for the weekend’s summit of the Group of 20 industrialized and emerging-market nations.
The G-20 attendees include officials from the European Union, France and Germany, all part of negotiations with the United States in the Transatlantic Trade and Investment Partnership. Earlier this week, French President François Hollande and German Economy Minister Sigmar Gabriel said talks have stalled amid disagreements.
The White House has dismissed the comments and announced that U.S. Trade Representative Michael Froman will go to Europe in mid-September to address outstanding issues. The goal, the White House said, is to produce a U.S.-EU agreement for the next administration to move through Congress.
While the U.S.-EU spat may concern Obama, the bigger issue is the fate of the Trans-Pacific Partnership. McConnell, R-Ky, in an Aug. 25 statement to the Kentucky Farm Bureau, appeared to firmly close the door on a vote during a lame duck session on the agreement between the United States and 11 Pacific nations.
“The current agreement, the Trans-Pacific agreement, which has some serious flaws, will not be acted on this year,” McConnell said. “But it will still be around. It can be massaged, changed, worked on during the next administration.”
McConnell noted that the current political climate had made “the politics of trade rather toxic.”
There seems to be no ambiguity in McConnell’s statement, but Obama, some of his TPP allies and opponents say the fight is not over. Where some see a closed door, others say three words in McConnell’s comments – the current agreement – may mean the door is ever so slightly still open to change TPP.
Both sides of the debate are parsing those words, and it may account for their muted response.
A spokeswoman for the U.S. Chamber of Commerce, a TPP backer, did not directly address McConnell’s comments but repeated the group support, adding “polls continue to show most Americans believe trade is an opportunity for increased economic growth.” “We think the TPP is especially promising in this regard, and we will continue encouraging the administration and Congress to address outstanding issues and find a path forward for its approval,” she said by email.
At the White House, Earnest added that Obama “is going to spend a lot of time on this trip in Asia advocating for the ratification of the Trans-Pacific Partnership, and underscoring how the United States and the U.S. economy benefit from deeper U.S. engagement.”
Obama will have an opportunity to speak with leaders of TPP member nations Australia, Canada, Mexico and Japan at the G-20 meeting. From there, Obama will fly to Laos for the Association of Southeast Asian Nations and East Asia summits that include leaders from five other TPP nations: Brunei, Malaysia, New Zealand, Singapore and Vietnam. The meetings end Sept. 8.
Lori Wallach, director of Public Citizen’s Global Trade Watch, said the Obama administration has gotten public clarifications from several TPP countries that they will honor eight years of data exclusivity for biologic medical products. It is not 12 years of protection from generic competition, but represents movement and demonstrates how the administration can get targeted TPP changes leaving the broader agreement intact.
Wallach sees a game of chicken being played out between Obama and congressional GOP leaders McConnell, Senate Finance Chairman Orrin G. Hatch (R-Utah) and House Speaker Paul D. Ryan (R- Wis.).
“He’s (McConnell) trying to make clear he is serious about this and that he really won’t support if they don’t give him what he wants,” Wallach said.
“The White House’s calculation is that if they drop in the bill that in the end Hatch, McConnell, Ryan and those guys will have to come around and support it because there is this huge corporate lobby in favor of it,” she said, referring to the final TPP implementing legislation the White House could send to Congress.
Under fast-track authority, sending the bill to Congress would force a vote on the trade pact.
Gary Clyde Hufbauer, senior fellow at the Peterson Institute for International Economics, said that could be a possible scenario, but he gives it a less than a 10 percent chance of succeeding.
He called the McConnell statement a very strong one that reflects the softness of support in the House and Senate.
“There are some Trumpists on the trade side amongst the Republicans who now are not going to vote for it,” Hufbauer said.
Bill Samuels, the AFL-CIO’s chief lobbyist, said the union will continue to fight TPP until Obama concedes defeat.
“We’re going to remain vigilant and we’re not taking our foot off the gas in terms of educating the public and members of Congress,” Samuels said.
Samuels said he does not see how Obama can advance the agreement given the opposition to TPP by Republican presidential candidate Donald Trump and Democratic presidential candidate Hillary Clinton.
“You’ve got more Democrats questioning the agreement and more Republicans wondering why they would help the president pass this when their own base has turned against it,” Samuels said.
(John Bennett contributed to this report.)
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