Trade Agenda Stagnant, For Now

Trade Agenda Stagnant, For Now

[authors: Thomas J. Spulak and Bonnie B. Byers]

The Administration continues to push trade issues on several fronts, but Congressional Democrats continue to show little interest in participating. During his recent trip to Asia, President Obama pushed Japanese President Shinzo Abe to conclude negotiations on a bilateral deal with the U.S. that would pave the way to concluding the Trans-Pacific Partnership (“TPP”), the twelve nation regional free trade agreement that also includes Australia, New Zealand, Singapore, and Vietnam. Many TPP issues are settled or close to being settled. However, negotiations with Japan continue to be problematic over issues such as agriculture and automobiles. The President left Japan without concluding the deal, but negotiators claim that there was some sort of “breakthrough” on agricultural issues as a result of the discussion. TPP talks will continue next week when chief negotiators will meet in Vietnam, followed by a ministerial level meeting later in May, likely in Singapore. For U.S. negotiators, automobiles, textiles, pharmaceuticals, intellectual property, state-owned enterprises, and labor and environment issues are key.

These issues are also critical to members of Congress, who must ratify any agreement. Democrats in particular are loath to deal with any trade pact in the lead up to the 2014 elections out of fear of upsetting members of the Democratic electoral constituency, including labor and environmentalists. Democratic leaders, in fact, have told the President to back off any attempt to move legislation that would facilitate the consideration of TPP and other trade pacts. That legislation, known as Trade Promotion Authority (“TPA”), guarantees the Administration an up or down vote on a completed trade agreement. Negotiating partners rely on this certainty before agreeing to a final pact knowing that without it, the U.S. Congress could re-open sensitive issues to the advantage of the United States, and to their detriment.

Beyond TPP there are the less advanced Transatlantic Trade and Investment Partnership (“TTIP”) negotiations, the intent of which is to reduce non-tariff barriers to trade, including regulations affecting the financial services industries and intellectual property issues. The fifth session of TTIP negotiations will take place later this month.

Many Republicans as well as some Democrats blame the President for not pressing hard enough to get TPA and TPP particularly concluded. But with the impending elections and the belief that free trade agreements are a liability for Democrats at the polls, it is no wonder why the President is providing less than aggressive leadership in this area. Chances are that once the elections are in his rear view mirror, the President will double down on his trade agenda.


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