1. Impact
• The battle over TPP will likely
divert political capital and US
government resources from
the TTIP negotiations.
• China may benefit
diplomatically in the Asia-
Pacific if the United States
blocks TPP from coming into
force.
• The trade debate may spill
over to greater US legislative
attention on currency
manipulation issues ahead of
2017.
US TPP implementation faces major hurdles in Congress
Monday, October 19 2015
On October 17, two regional newspapers published editorials under President Barack
Obama's byline advocating ratification of the Trans-Pacific Partnership (TPP) free trade
agreement. The Obama administration faces an uphill fight in Congress to secure enough
votes for TPP ratification, given Democratic suspicions of free trade agreements,
Republican animus for the White House and the frustrations of key industry groups in the
United States. The United States can in effect veto the TPP's international implementation,
while the White House's 'Asia pivot' policy relies partly on firmer trade ties with East and
South-east Asia.
What next
The White House will expend significant political capital on a state-by-state basis, seeking
to form a bipartisan coalition that would launch the ratification process before Obama
leaves office in January 2017. However, Obama is unlikely to secure any movement on
TPP implementation in Congress before November 2016 due to the political sensitivities
involved. There is a sizeable chance that US domestic politics may scupper the entire
TPP project, though much depends on the leadership race in the House of
Representatives, the specific text of the agreement and the outcome of the 2016 elections.
Analysis
Under the terms of the 'fast track' trade promotion authority (TPA) legislation passed in
April, the president must notify Congress 90 days in advance of signing TPP.
The full text of the agreement must be made public 60 days before signature. Politically,
this is when a clearer picture of congressional support and opposition can be formed.
The president then is required to provide Congress within 60 days after signature with a list
of necessary changes to domestic legislation to comply with the terms of the negotiated
agreement.
There is no mandated deadline for Congress to introduce a TPP implementation bill. While
the congressional leadership can delay the start of the legislative process, once the bill is
introduced, the fast track legislation ensures that both houses of Congress will act on
implementation within 90 days.
Strict caps on debate time and the automatic 45-day deadline for committee consideration
limit the scope for procedural obstructionism by TPP opponents in Congress.
The agreement implementation bill is subject to a simple up-or-down vote; the attachment
of amendments including politically-toxic 'policy riders', which have been used to block the
passage of unpopular legislation, is not allowed.
Ratification prospects
For TPP to come into force, all twelve TPP countries have to ratify the agreement within
two years. Should this not occur, the agreement can still partially come into force if six
original signatories accounting for 85% of the proposed bloc's GDP ratify the TPP.
However, the United States accounts for about 62% of TPP GDP, and therefore possesses
a veto over the agreement coming into force.
President Barack Obama speaks
during a meeting with agriculture and
business leaders about the Trans-
Pacific Partnership at the Department
of Agriculture in Washington
(Reuters/Kevin Lamarque)
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2. The TPP's future hinges on US
ratification
It is as yet undetermined when Congress will begin the 90-day implementation process.
Given the reporting requirements for the president, the Congress can begin consideration
of the TPP come late January to early February.
However, the congressional leadership has indicated that the process may not even begin
until the 'lame duck' period after the November 8, 2016 elections, opening the possibility
that Obama may be out of office by the time the implementation legislation reaches the
White House.
Post-presidential elections?
Congressional consideration of TPP is more likely after the election for two main reasons.
First, the presidential primaries begin in February, with many candidates (including the
current frontrunners in both parties) expressing reservations or outright opposition to TPP.
Pro-trade voices in Congress may seek to avoid fuelling anti-TPP sentiment that may push
an opponent of the pact into office.
Second, all members of the House and one-third of the Senate are up for re-election come
November. By delaying the vote until November, sitting legislators avoid casting votes that
may prompt a summer primary challenge on the trade issue and alienate key labour and
industry sources of campaign financing.
Domestic politics
Domestic ratification of TPP in the United States faces an unfavourable political climate,
raising the risk that a coalition of sceptical Democrats, anti-administration Republicans
and frustrated interest groups may undo years of diplomatic negotiations.
Democrats
In Congress, many Democrats have consistently opposed the pact because of the effect it
would have on US industry, particularly in sectors with strong trade unions, which are wary
of job losses stemming from competition with tariff-free manufacturers from the Pacific
Rim.
In the early 1990s, President Bill Clinton faced similar opposition to NAFTA. Key sections
of the Democratic base, citing the 'lessons' of NAFTA, have expressed opposition to TPP,
especially Democrats from the heavily-unionised industrial states of the Midwest.
Progressive Democrats -- a rising faction within the party represented in the Senate by
Elizabeth Warren of Massachusetts and presidential candidate Bernie Sanders -- have
strong ties to labour unions and are disappointed that firmer environmental, labour and anti-
human trafficking protections were not introduced (see UNITED STATES: Clinton faces
progressive challenge - October 16, 2015).
Despite her time facilitating TPP negotiations when she was Obama's Secretary of State,
Democratic frontrunner Hillary Clinton has come out against the agreement, citing
insufficient measures addressing "currency manipulation" by Pacific Rim countries, a key
issue for US manufacturers.
While Clinton's pivot on TPP may be intended to shore up support from sceptical labour
unions in the Democratic primary rather than any significant opposition to free trade by the
candidate, the absence of any strong pro-TPP voices in the party's nomination contest
may spill over into Congress.
Republicans
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US TPP implementation faces major hurdles in Congress

3. Moderate Republican
leadership may not be able to
deliver TPP
The chaos in the House surrounding the leadership succession to Speaker of the House
John Boehner also dims the prospects for US TPP implementation.
House Majority Leader Kevin McCarthy's unexpected withdrawal from the speakership race
weakens the moderate Republican bloc that would favour TPP ratification and emboldens
the hardliner House Freedom Caucus, who strongly oppose most measures favoured by
the White House (see UNITED STATES: New leaders will not unify Republicans - October
5, 2015).
Republicans may also wish to deny Obama another key policy victory before he leaves
office, especially given the survival of his health care reforms in the courts and the passage
of the nuclear deal with Iran.
Industry groups
When the specific text of the TPP agreement is released, several industry groups, ranging
from manufacturing to pharmaceuticals to tobacco, may seek to pressure key
policymakers to oppose the agreement's legislation.
US negotiators reportedly offered concessions in the final talks leading to the agreement
that will trigger the opposition of key lobbies, including:
• denying tobacco companies the ability to sue countries for anti-smoking regulations;
• more lenient 'country of origin' rules for Asian auto manufacturers; and
• an eight year exclusivity period for pharmaceutical companies to manufacture
expensive biologics, instead of twelve years.
In addition to alienating various regional legislators in the tobacco-heavy South and auto
manufacturers in the Midwestern 'Rust Belt', these provisions run afoul of industry groups
with significant congressional influence through campaign donations.
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US TPP implementation faces major hurdles in Congress