Related News

Pacific nations leave US behind to sign revamped TPP

Resurrected CPTPP to be signed in March

Asian countries open to, but baffled by UK TPP interest

New look TPP moves towards conclusion, without Trump’s America

Trade high on agenda as Trump tours Asia

The Trans-Pacific Partnership (TPP) moved one step closer to its conclusion, as the Senate granted President Barack Obama fast-track authority for free trade agreements.

After months of wrangling, the Trade Promotion Authority (TPA), which allows Obama to send the final text of the TPP to Congress for an up-down vote, with representatives unable to make any changes to the agreement, was passed by a vote of 60-38.

The Senate vote followed approval by Congress last week. It means the cornerstone of Obama’s foreign and trade policy for his second term in office is still alive – even if he had to rely on the support of the Republican Party to keep it kicking.

It’s expected that leaders of the 12 nations involved in the deal will convene within a matter of weeks in an effort to conclude negotiations. The Australian Trade Minister Andrew Robb recently said that the agreement could be finalised in a week, once fast-track was approved, though others are not as optimistic.

“The earliest they could do it would be December 1, but that’s only if everyone already has all the items in place and the negotiations can be concluded in a month. Getting a group of countries together, when it comes to the nitty-gritty, is never as easy as you think it’s going to be,” IHS’ John Raines tells GTR, adding that if the agreement fails to be concluded by next summer, it is likely to be pushed back until after the US presidential election in November 2016.

Some of the other 11 countries involved in the talks – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – had voiced concerns over the US government’s failure to pass the legislation in both Senate and Congress.

Niels Marquardt, the CEO of the US Chamber of Commerce in Australia, tells GTR that the delays and very public fallout over fast-track were raising questions about US credibility in Asia Pacific, and its commitment to the world’s largest free trade agreement. At the height of the debate last week, Andrew Robb cancelled an appearance at an event to mark the tenth anniversary of the US-Australia FTA, citing illness, but popped up in the same city on the same day to sign an FTA with China.

Governments have, however, welcomed the progress in the US, with the Japanese Prime Minister Shinzo Abe describing it as a “great step forward”.

“I am also very concerned about the IP chapter and its potential impact on internet freedom and the cost of medicines,” Melissa Parke, Labor Party

It’s understood that there are multiple issues still to be resolved in the TPP. Japan and the US must still iron out details on agricultural products, while there is uncertainty on the Australian side about matters relating to intellectual property, particularly in the pharmaceutical sector.

“I am also very concerned about the IP chapter and its potential impact on internet freedom and the cost of medicines. The secrecy around the TPP negotiations seems to me to be, inter alia, a way of circumventing the public processes of WTO and trade-related aspects of intellectual property rights (TRIPS) in order to achieve benefits for multilateral corporations that they cannot obtain in the open multilateral process,” the Australian Labor Senator Melissa Parke tells GTR.

Also on the agenda will be the controversial investor-state dispute settlement (ISDS) clause and potential carve-outs. Australia is understood to favour exempting Big Tobacco from inclusion in this, which would effectively allow companies to sue the government for loss of profits due to plain packaging laws.

Once the negotiations are concluded, the process of finishing a deal in the US is complex. There must be 60 day period between the release of the text and Obama’s signature, after which the International Trade Commission will have 105 days to analyse the potential economic impact. Congress will then have 90 days to debate the bill.

With the US electoral primaries set to kick off early in 2016, the lengthy procedures may scupper politicians’ hopes of keeping TPP out of the public debate.