In a surprising development, it is congressional Republicans and a few of their business allies that now pose the biggest threat to the Trans-Pacific Partnership (TPP), a trade agreement among 12 countries with 40 percent of the world’s GDP. When, after five years of talks, an agreement was finally announced on October 5, neither a single Republican leader in Congress, nor any broad business federation could be found to support it. Republican support for the TPP is indispensable since most congressional Democrats oppose it and former Secretary of State Hillary Clinton has just come out against it.
Consequently, ratification is both a question of when and if. Without ardent efforts by GOP leaders to move some of their reticent rank-and-file, the TPP cannot be ratified. Legally, Congress cannot even vote until the February primary season at the earliest and, in an election year, ratification will be an uphill climb even under the best circumstances.
Optimists argue that much of the immediate criticism of the deal is temporary, the result of a misperception by some business sectors, such as pharmaceuticals, that the Obama administration sold them out in order to get a quick deal. But the reality, as one Washington-based business source told me, is that, “Reaching agreement was a case of now or never. The other countries were adamant that this had to be the last ministerial meeting.” Japanese sources said the same.
The hope among TPP proponents seems to be that the frustration will blow over, and that the deal’s detractors will recognize that half a loaf is better than none at all. Some of the deal’s discontents, meanwhile, have convinced themselves that they can force a renegotiation, either under Obama or his successor, if the latter is a Republican. They point to the negotiations for the U.S.-Korea Free Trade Agreement, during which the United States went back to the table to make changes three times after the initial signing. But South Korea was just one country. Eleven United States Trade Representative Michael Froman has said that the pact will eliminate 18,000 tariffs that other countries have imposed on U.S. exports and that the United States will eliminate 6,000 of its own import tariffs. That, estimated the Peterson Institute for International Economics, would mean that, in 12 to 15 years, American exports would be 4.4 percent higher than without TPP, imports 3.7 percent higher, and GDP 0.2 percent higher.
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