TPP to live again in US Senate, but Congress a higher hurdle: Kelsey
By Pattrick Smellie
May 14 (BusinessDesk) - US president Barack Obama will try again to get US Senate backing for a vote on 'fast-track' authority that he hopes will smooth the way to a deal on the 12-nation Trans-Pacific Partnership free trade and investment pact, but the Congress is still likely to kill the deal, says University of Auckland law professor and TPP expert Jane Kelsey.
Obama suffered a serious political setback on Tuesday when the Senate failed to back support for Trade Promotion Authority legislation, known as 'fast-track', which allows a president to put a trade deal to a simple 'yes or no' vote in the US Congress.
"Yesterday’s flurry was a foretaste of the divisive political battles that will play out in the US Congress over the next couple of months’, Kelsey said in a statement. "Obama is now forced to rely on Republicans, with whom he has an otherwise toxic relationship. Unless they can together work a miracle, there is still no prospect of getting a final deal into Congress before the August recess, and the window effectively closes on finalising the TPP during his presidency."
Conventional political wisdom says the TPP needs fast-track authority from US law-makers by the end of June if the TPP deal itself is to be ratified before 2016, a presidential election year, when the issue is likely to be too politically contentious to advance. A number of the other signatory countries to the TPP are not willing to have their own parliaments approve the deal unless it first has fast-track process in the US, given the potential for US politicians to change its terms or add elements that have not been negotiated.
A key to the 52-45 loss in the Senate on Tuesday, Washington time, was the failure of the proposal to include any wording disallowing currency manipulation by signatory countries, which American politicians have identified as a key risk to US competitiveness.
However, the vote was also a procedural gambit to try to create momentum for a positive vote in the Congress, which is required to give its assent to fast-track before it advances to the Senate.
"Because fast-track is a 'revenue bill', the process was supposed to start in the House of Representatives (Congress)," said Kelsey, who has closely observed the TPP negotiation process and is critical of many of its provisions. "That didn't happen because Obama doesn't have the votes. Indeed, the way he has run the campaign for fast track in recent weeks seems to have alienated more of the House Democrats he needs to get onside."
Reports in the Washington Post this week suggest that while most of the 245 Republicans in Congress are expected to support the fast-track push, he will also require between 25 and 30 Democratic members of Congress to support it and that fewer than 20 are supporting fast-track, despite intense lobbying in recent weeks by the White House.
A Wall Street Journal editorial published May 12 said Obama had turned his "politics of contempt" - usually reserved for Republicans - on his Democrat allies, who were abandoning him. Obama has made a successful TPP outcome a touchstone of his presidential legacy.
However, front-running Democratic Party presidential hopeful Hillary Clinton has so far not backed TPP or fast-track, with the president more dependent than ever on his Republican Party opponents for the necessary support for fast-track authority.
While Republicans control both the US Senate and Congress and could theoretically deliver fast-track for a trade liberalisation deal in tune with the party's stated political positioning, TPP is controversial in the protectionist wings of the party, with many lawmakers fearing politically damage from fears TPP would cost the US jobs at the expense of the other signatories.
Other countries attached to the TPP initiative are Japan, Australia, New Zealand, Malaysia, Singapore, Vietnam, Canada, Mexico, Peru, Chile, and Brunei. New Zealand supports the deal as long as it gives "high quality" access to the heavily protected agricultural markets of Japan and the US, with which the country has no free trade agreements at present.
"If Obama does pull it off, he will have wrought immeasurable damage inside his own party as it heads into a crucial election year," said Kelsey.