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Obama’s SOTU may signal further delays in TTIP, TPP negotiations

The Financial Times reports, “President Barack Obama delivered a carefully worded message on trade in his State of the Union speech on Tuesday night, in the hope of sparking political momentum for negotiations with the European Union and 11 Asia-Pacific nations (including Canada) without annoying sceptical members of his Democratic party.”

“Mr Obama said the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership – key planks of his second-term international economic agenda – would help generate new employment among small businesses seeking to export around the world. He noted the need to ‘work together on tools like bipartisan Trade Promotion Authority to protect our workers, protect our environment, and open new markets to new goods stamped ‘Made in the USA’. TPA – also known as ‘fast track’ legislation – would make it much easier for trade deals to pass Congress because they would not be susceptible to amendments and they would move along an expedited timeline.”

However, “Mr Obama only cited the need to ‘work’ on TPA – a less forceful endorsement, reflecting the expectation that there may have to be substantial changes to the legislation in coming months.”

“America’s trading partners – particularly TPP countries and the EU – have been closely watching the fate of TPA as they weigh up making further and final concessions to wrap up the negotiations. Progress on TPA would give them confidence that any agreement would not have to be reopened in the face of congressional scepticism. If fast-track legislation stalls in Congress it could jeopardise the conclusion of both the TPP and EU deals.”

It is not known when negotiations on the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership could be completed. The 19th round of Trans-Pacific Partnership talks took place in August 2013 in Brunei. The next round is scheduled to start the week of February 17 in Singapore. A Mexican trade official recently suggested that the talks could conclude at the end of April. A 4th round of negotiations on the TTIP will take place this March 10-14 in Brussels. The European Commission is also currently undertaking a three-month consultation on the investor-state dispute settlement mechanism in TTIP, which is expected to conclude by April 20. 

In terms of the American political calendar, there will be critical midterm congressional elections on November 4. All 435 seats in the US House of Representatives and 33 seats in the US Senate will be contested. The next US presidential election takes place on November 8, 2016.