The AFR is reporting today that the Republican Party’s gaining of a senate majority in the US mid-term elections will likely hasten the conclusion of the Trans-Pacific Partnership (TPP) trade deal, which now could be concluded by the end of this year or early 2015:
Negotiating teams have remained in Australia for the past fortnight in a bid to nail down the deal.
…chief executive of AmCham, Niels Marquardt,… said that the Republicans’ victory boosted the prospects of the TPP being concluded this year or early next year…
“Generally speaking, the Republican Party is more unambiguously supportive of free trade and more likely to be supportive.
“The Democratic Party has some internal divisions about free trade, which made it difficult for them to move forward on the deal,” Mr Marquardt said.
The Japan Times, however, is less bullish, noting that the Republicans may not grant President Obama trade promotion authority (TPA) – which is required to enable the President to negotiate the TPP without congressional debate on the final agreement – until a host of issues are resolved, none of which are particularly easy:
Other nations, especially Japan, are reluctant to cut trade deals unless they know Obama has the authority to get it passed in Congress.
“A Republican Senate and House offers a more straightforward legislative path (to granting TPA). Ultimately, however, presidential leadership is the essential element,” Miller said.
However, a host of nonagricultural issues remain to be solved before Congress is likely to agree to TPA, let alone a final TPP agreement.
Last year, 290 Republicans and Democrats in both houses of Congress called on Obama to address currency manipulation in the TPP talks, a concern U.S. lawmakers have about Japan in particular. But this is an issue that has yet to be fully addressed in the trade negotiations.
“It’s becoming increasingly clear that congressional demands relating to the inclusion of currency disciplines in TPP will have to be met for a deal to get through Congress,” said Lori Wallach, director of Washington-based Public Citizen’s Watch, which opposes TPP, speaking after TPP negotiations were held in Australia last month.
“The election results mean that the Obama administration will not be able to step back its position regarding Japan and agriculture in TPP even if it were so inclined, as the demand for tariff zeroing on all commodities comes from the Republicans. Also, the prospect that fast-track will be passed during Obama’s last two years is further reduced by Republican control of the Senate,” Wallach said. “Fast track” is another name for trade promotion authority.
“The version of trade authority supported by the incoming GOP chairman of the committee with jurisdiction over trade does not have wide support in the House of Representatives among Republicans or Democrats, while the Democratic senator that had been chair was working to write a new type of trade authority that might have garnered wider support,” she added.
I noted earlier this year that Senate Democratic majority leader, Harry Reid, was a key obstacle to President Obama gaining TPA. So now with the Republicans in control of the Senate, it raises the prospect of the TPP trade pact passing the necessary political hurdles in the US.
This is bad news for Australia. As explained repeatedly, the TPP is a flawed trade deal that betrays Australia’s national interest. Not only would it grant increased market power to US pharmaceutical and digital firms, increasing costs for Australians via extensions to patents and copyright controls, but it would also limit the Australian Government’s ability to form public policy and regulate in the public interest for risk of being sued by foreign corporations via the investor-state dispute resolution clauses attached to the TPP.
Let’s hope that the Japan Times is right, and opposition from within the US remain strong enough to scuttle the granting of TPA. Because the Abbott Government seems committed to selling Australia out on the TPP for the sake of short-term political gain.