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The TPP faces hurdles to ratification in the US

TPP secret negotiations

With negotiations for the Trans-Pacific Partnership (TPP) now completed, what hurdles does it face in the ratification process? Globe and Mail columnist Barrie McKenna notes, “The TPP could take a long time to become a reality, perhaps as long as years. And there is a not-insignificant chance that the agreement will die altogether.”

He highlights, “The biggest hurdle facing the TPP is in the U.S. President Barack Obama narrowly secured a mandate from Congress to negotiate the deal – so-called trade promotion authority. With slightly more than a year left in office, Mr. Obama must now roll the dice again to get Congress to ratify it. Already, several key members of Congress, who gave Mr. Obama a mandate to negotiate, say they don’t like the looks of the deal he negotiated. A swing of just a handful of votes could torpedo ratification. He will need the support of both Republicans and Democrats. And he’ll be seeking approval in the middle of a presidential campaign, in which the Republican and Democratic front-runners (Donald Trump and Hillary Clinton) are already trashing the deal.”

Aspects of the automobile, dairy, investor-state and patent provisions are also contentious (often for the wrong reasons) in the United States.

“Ford Motor Co., for example, is pushing Congress to reject the deal because it doesn’t have any provisions to address what it says is currency manipulation by Japan and other countries. Other members of Congress have expressed concern about the lower domestic content rules for vehicles in the TPP. Lawmakers from major dairy-producing states, such as Wisconsin and New York, are also unhappy that Canada is opening just 3.25 per cent of its market to duty-free imports. They had wanted more new access in Canada and Japan than they would lose to New Zealand and Australian imports at home. A clause in the agreement that bars cigarette companies from using a dispute-settlement mechanism to challenge anti-smoking laws could peel off as many as a dozen votes in tobacco-growing states, such as Virginia, Maryland and North Carolina. A clause in the deal that gives a minimum of five years of patent protection to a new class of drugs known as biologics – biological products that include vaccines, blood and products that combine natural substances – is also contentious. Senate finance committee chairman Orrin Hatch has said anything less than 12 years won’t fly.”

In terms of Canada, the outcome of the October 19 federal election will be a major factor.

The Conservatives clearly support the deal. Conservative leader Stephen Harper says, “This is a once-in-a-lifetime agreement, a once-in-a-lifetime moment of decision. You are either in or out, and we choose to be in because there is simply too much to gain for Canada. …We have chosen a future of participation over isolation. …This deal is without any doubt whatsoever in the best interests of the Canadian economy.”

On October 5, the day the deal was announced, Liberal leader Justin Trudeau stated, “The Liberal Party of Canada strongly supports free trade… The government has an obligation to be open and honest about the negotiation process, and immediately share all the details of any agreement. Canadians deserve to know what impacts this agreement will have on different industries across our country. The federal government must keep its word and defend Canadian interests during the TPP’s ratification process – which includes defending supply management, our auto sector, and Canadian manufacturers across the country. If the Liberal Party of Canada earns the honour of forming a government after October 19th, we will hold a full and open public debate in Parliament to ensure Canadians are consulted on this historic trade agreement.”

NDP leader Thomas Mulcair has been clear in his opposition to the TPP. Just prior to the conclusion of the talks he wrote to Harper’s trade minister Ed Fast stating, “As you participate in Trans-Pacific Partnership negotiations this week in Atlanta, I wish to advise you that an NDP government will not consider itself bound to any agreement signed by your Conservative government during this federal election.” He also promised to “rip up” the deal if it hurt family farmers. And on October 8 he vowed to scrap the TPP highlighting, “I would never bring this deal to the Canadian Parliament.”

Should we get a minority parliament after the October 19 election, the dynamics could be very interesting.

If a Liberal minority government is formed backed by an accord with the NDP, would Mulcair demand that Trudeau modify his position on TPP in exchange for his support in non-confidence votes in the House of Commons?

If the Conservatives fail to win a majority of seats, would they use the TPP as a wedge issue to block a Liberal-NDP accord? Globe and Mail columnist Jane Taber has written, “The nightmare scenario for the Trudeau Liberals, the NDP insider says, is if the Conservatives win 150 seats, the NDP wins 130 and the Liberals win 60. And then Mr. Harper quickly introduces his Speech from the Throne, using the Trans-Pacific Partnership trade deal as the linchpin. Does the Liberal Leader support Mr. Harper’s government and vote for the Throne Speech, giving the Conservatives the ability to say they have the confidence of the House of Commons? Or does he vote it down, after saying on the campaign trail that his party is ‘resolutely pro-trade’? ‘Agony’, the NDP insider says about Mr. Trudeau’s choices.”

Presumably, we’ll see the ratification process play out in Canada early in the new year. McKenna speculates that a ratification vote on the TPP might happen in the US Congress in April 2016. The deal would also face various forms of ratification in Brunei, Chile, New Zealand, Singapore, Australia, Japan, Malaysia, Mexico, Peru and Vietnam.

Further reading
What’s in the Trans-Pacific Partnership? (October 2015 blog)