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| The leaders of the prospective TPP member countries in 2010. |
The presidential campaign is the focus of the American political universe right now. That focus will only intensify over the next two and a half months as November 8 draws closer.
But despite that hyper-focus, there is actual governing to do after the campaign ends. Five key issues that will shape the post-election political agenda aren’t getting enough attention right now, in my estimation.
Over the next two weeks I’ll discuss each of them. Today I wrote about the future of the Trans-Pacific Partnership.
The Trans-Pacific Partnership (TPP) is an incredibly complicated prospective international economic agreement among twelve Pacific Rim countries (*), the largest of which is the United States. After almost a decade of negotiations, the deal was drafted on October 5, 2015, the text was released to the public one month later, and the agreement was formally signed by each of the 12 countries on February 4.
The final step is ratification. (**) Congress must sign off on the deal, and House and Senate approval is not a foregone conclusion.
Congress reauthorized Trade Promotion Authority (TPA) (***), also known as “fast track” in June 2015. All trade agreements until 2021 must be given an up-or-down vote in the House and Senate. They cannot be amended or filibustered.
The debate over reauthorizing the fast track process last summer grew quite heated and pitted President Obama against a substantial portion of Democrats in Congress. It essentially became a proxy debate for the TPP itself. But Congress did pass fast track, albeit narrowly, by a 218-208 margin in the House and a 62-38 margin (just enough to defeat a filibuster) in the Senate. It would stand to reason that the same narrow coalition in Congress of most Republicans and some relatively moderate Democrats that passed TPA would reunite to ratify TPP.
Congress may still pass TPP but it hasn’t yet. It’s an open question if and when the final congressional votes for ratification will take place.
The details of the finalized TPP, which upset some supporters who voted for fast-track, and anti-trade election-year politics have made final passage an uphill battle.
Richard Burr, Rob Portman, Thom Tillis, and Pat Toomey, Republican Senators who cast votes in favor of fast track last year, came out against the TPP, citing various inadequacies of the final agreement. Of the four, all but Tillis are up for re-election in the fall. Virginia Senator Tim Kaine also voted for TPA but came out against the TPP when he became the Democratic vice presidential nominee.
Seventeen House Republicans, mostly from agriculture-heavy states, also said they couldn’t support the TPP because tobacco companies had been carved out of the investor-state dispute settlement (ISDS), leaving them more vulnerable to government regulation by trade partners.
A number of key stakeholders backed off support for the deal. Chuck Schumer, the incoming leader of the Senate Democrats, said the U.S. needs to “dramatically readdress how we talk about and what we do about trade” because the current approach is “not working.” He promised not to allow the TPP in its current form to come up for a vote if he becomes the Majority Leader.
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| Secretary Clinton has criticized the TPP on the campaign trail, echoing her primary rival. |
Rhetoric on the presidential campaign trail has been tough on free trade. Donald Trump made anti-trade arguments central to his message and Republican runner-up Ted Cruz opposed the TPP. Hillary Clinton came out against the deal during her primary campaign against Bernie Sanders, who has been a consistent critic of free trade agreements.
Given that Clinton is likely to become President and Schumer is likely to become the Senate Majority Leader come January (****), it is difficult to imagine the current version of the TPP becoming law after this year.
President Obama views the TPP as important to his economic legacy and signaled that he will push for a ratification vote during the lame-duck session.
But House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, supporters of the TPP, say there is no point in pushing for lame-duck passage and that the future of the agreement is up to the next president. Ryan outright said that the deal “doesn’t have the votes.”
After the passage of fast track, the TPP only needs 51 votes in the Senate, so it has room to spare in the upper chamber. Sixty-two senators supported TPA. But the vote in the House for fast-track was very close, passing with a bare majority of 218 votes. If all members are present and voting, supporters of the deal have no margin for error.
The final angle to consider is potential renegotiation of the TPP. Members of Congress who are generally supportive of free trade and the TPP in theory but aggrieved by specific provisions (like the tobacco ISDS exclusion) have called for the U.S. to renegotiate the deal to meet their concerns.
This would be practically impossible for the Obama administration. International agreements like the TPP take years to hammer out and Obama leaves office in less than 5 months.
Would Clinton try to renegotiate the TPP? As Secretary of State, she helped negotiate the outlines of the deal but later said that the finished product didn’t meet her standards. A cynical reading of her current opposition is that it’s motivated by political concerns. Regardless, Clinton is clearly is open to agreement among these countries along certain lines.
However, practical realities make renegotiation extremely difficult. The 12 countries began working on the TPP in 2008. A final agreement wasn’t reached until 2015 because the TPP is so vast and so many different little disputes needed to be resolved. It is over 5,000 pages and covers many policy areas that affect numerous industries across the member countries. In addition to gradually lowering tariffs on the imports and exports, the traditional concept of free trade, the deal establishes a whole host of sweeping international economic rules and regulations.
Opening the TPP up again would invite renewed scrutiny and input from, just to name three big industry players: the Canadian dairy industry, Japanese automakers, and American drug manufacturers. It would potentially upset a delicate balance. Failure to ratify this version of the deal would, in my view, lead the other countries to walk away.
And even if the 12 countries could somehow reach another deal that satisfied industry concerns, like on tobacco being excluded from ISDS or on patent exclusivity for pharmaceuticals, it would probably gain as many votes on the right as it would lose on the left, and vice versa. Besides, it’s unclear that Clinton as President would even want to expend political capital on an issue that is so controversial within her own party.
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| Are McConnell and Ryan practicing their smiles for a TPP signing ceremony? |
Bottom line: At this point, it’s probably more likely than not than the TPP dies given the array of hurdles it faces. But passage is not impossible for a few reasons.
While it looks bleak now, the lame-duck session will be a unique political moment. Small-d democratic accountability will be at a low point. There will be dozens of lawmakers out of a job in a few months and never needing to face voters again. Even those who will return for the 115th Congress will be at least two years away from their next election. That pool of defeated and retiring Members could produce some unexpected “aye” votes on TPP.
Moreover, the TPP is still backed by the President of the United States, the Speaker of the House, the Senate Majority Leader, and most of the American business community. That combination doesn’t lose often.
The defeatism emanating from McConnell and Ryan is discouraging for TPP supporters. But it isn’t surprising that Republican congressional leaders aren’t publicly championing Barack Obama’s top legislative priority during the summer before a presidential election. If the votes are gettable and it’s clear that the window for passage will close when the new President and Congress take office, I think that Ryan and McConnell will push for Congress to ratify the agreement.
The fate of the TPP has appeared grim before and overcome obstacles: at points during negotiations with the other Pacific countries and most notably in Congress after the House overwhelmingly rejected Trade Adjustment Assistance on June 12, 2015.
The odds look long right now too. On one hand, the TPP has powerful friends, and Congress has never rejected a fast-tracked trade agreement. On the other hand, trade deals are a tough political sell in 2016 and inaction on controversial issues is usually a good bet with this Congress.
We’ll have to wait until after the election to see which will prevail.
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| There is a rules of origin joke to be made here. |
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I discussed and debated the Trans-Pacific Partnership last November on a podcast with my friend Kevin Werner. He is a proponent of the TPP, I am skeptical. You can listen to that conversation here.
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(*) Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam.
(**) I don’t know a ton about how the ratification process will work in the other 11 countries, but most operate under parliamentary systems in which the government that negotiated the agreement controls the legislature responsible for ratifying it. Additionally, there are one-party states like Vietnam in which ratification is a foregone conclusion for obvious reasons.
(***) There are too many damn acronyms to keep track of when talking about this and I’m sorry.
(****) There will likely be more Democrats in both houses of Congress after the election as well, and Democrats were by far the more trade-skeptic party in the last Congress. Only 13 of 46 Democrats in the Senate and 28 of 188 Democrats in the House voted for TPA.
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