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Trans-Pacific Partnership Talks Wrapping Up as Obama Seeks Republican Support for Deal

The Trans-Pacific Partnership will be Obama's signature economic component of the broader US pivot to Asia, and if negotiators reach an agreement this week, the treaty will likely be ratified before Obama leaves office.

by Shannon Hayden
Oct 2 2015, 9:30pm

Photo via Wikimedia Commons

Trade ministers from 12 countries meeting in Atlanta to negotiate the Trans-Pacific Partnership (TPP) have extended their talks this week, hoping to conclude negotiations on Saturday on an agreement that affects 40 percent of the world's GDP.

"We have been having a hard negotiation until today," Japan's minister for the negotiations, Akira Amari, told reporters on Friday, according to Politico. "Situations are difficult, but we started seeing hope. So we decided to extend negotiations one more day and work as hard as we can to get a deal."

At week's end, negotiators were still working on a few sticking points.

The hot-button issue of drug generics was among them. The US is pushing for a 12-year ban on generic imitations of biologic drugs, those complex medications that are often on research's cutting edge. Japan basically agrees; Australia and New Zealand are pushing for five years. Protesters outside the meetings have disagreed in no-uncertain terms, holding up signs and wearing T-shirts that read, "No TPP Death Sentence" or "I Have Cancer, I Can't Wait Eight Years."

The pharmaceutical industry isn't the only one with skin in the game here: TPP negotiators are also wrestling with issues for the dairy, auto, and tobacco industries.

How fluidly milk will flow among the TPP signatories is being debated, with the US, for instance, worried about competition from New Zealand.

Japan's auto industry is at odds with that of Mexico's and Canada's over "rules of origin," a formula that dictates how much of an auto part or finished vehicle must be made up of parts from the TPP countries. Mexico and Canada are angling for more than 60 percent; Japan for 40%. The latter would like to use less expensive parts from Thailand and China, countries that are not part of the TPP.

Then there's tobacco. The US proposed an agreement that would allow governments to prevent foreign tobacco companies from challenging laws that curtail tobacco use; Mexico and Canada are pushing back.

The overall agreement, which accounts for 40 percent of global economic output and 25 percent of global exports, is the economic centerpiece of the Obama administration's "Pivot to Asia." If the agreement is finalized, President Obama will push for ratification before he leaves office.

The TPP negotiating teams and trade ministers (from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam) last met in July in Lahaina, Hawaii. The end result of that meeting was an announcement stating they'd met for a week, had made good progress on the deal, and would continue meeting.

Related: The US Is Threatening Canada Over Some Cheese and Milk, and Canada Thinks That's Mean

Although Atlanta may not be as scenic as Lahaina, this week's meetings looked to be productive.

The sticking points should be "eminently resolvable," said Edward Alden, senior fellow at the Council on Foreign Relations (CFR). "There is a negotiating advantage to waiting until the end," Alden said, "but that's disappeared at this point."

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Readers may recall the bruising battle over Trade Promotion Authority (TPA) won by Obama this past summer. With this authority now in place, the president is able to negotiate trade agreements directly and then submit them to Congress for an up-or-down vote, rather than allowing Congress to change or amend (or filibuster) the agreement. TPA also lays out a timeframe for the ratification process, so if negotiations do conclude this week, Congress will most likely take up the TPP ratification in January or February of 2016.

Obama has strongly backed the TPP. Explaining the TPP's significance at a conference last week, US Trade Representative Michael Froman stated that, when completed, the TPP will, "help bring jobs to our shores, stability to a region in flux, and higher standards to the global economy." 

"The TPP's significance is not just economic, it's strategic — as a means of embedding the United States in the region, creating habits of cooperation with key partners, and forming a foundation for collaboration on a wide range of broader issues," he said. 

The agreement has faced intense criticism from numerous entities who claim the TPP "will reduce US wages, cost US jobs, jeopardize lives abroad, and enable predatory corporations to resemble the dinosaurs in Jurassic World." 

The Obama administration rejects these critiques. As Derek Scissors, the resident scholar in Asian economic issues at the American Enterprise Institute (AEI), a conservative think tank, told VICE News, "the TPP is the most important trade agreement in more than a decade — for better or worse."

Related:  Senate Democrats Block Plan to Fast Track Obama's Secretive Asian Trade Agreement

As with the TPA process — and as with almost nothing else — Obama will count on Republican support for the TPP. 

If successfully moved through Congress, major changes to the agreement would be difficult for Obama's successor. But AEI's Scissors says that if the TPP is not ratified before a change in administrations, "the new president will want [to] put their own stamp on it." 

"It's possible a new president, depending on who it is, will want a substantive change," he said. "This could be a problem given the number of countries involved."

Discussions are already taking place regarding potential additional members to the TPP. South Korea is the most likely new member following ratification — with a US Free Trade Agreement in effect, they are primed both economically and politically to join the group. Taiwan and the Philippines might come next, but the question of China's membership seems foggy at this point. 

"The US would love to have China join, but it's unclear [whether] they could live up to the TPP obligations. The US now is more focused on the US-China Bilateral Investment Treaty," said CFR's Alden.

Follow Shannon Hayden on Twitter: @ShannonKHayden 

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