[CTC] Presidential politics complicate trade talks

Mon Sep 28 06:53:06 PDT 2015

Presidential politics complicate trade talks
Officials from the U.S., Japan and 10 other Pacific Rim countries are trying to complete a massive deal.
By Doug Palmer <http://www.politico.com/staff/doug-palmer>
09/27/15 03:05 PM EDT
Updated 09/27/15 10:08 PM EDT

Read more: http://www.politico.com/story/2015/09/obama-trade-pacific-rim-japan-asia-214121#ixzz3n2cZj6tW <http://www.politico.com/story/2015/09/obama-trade-pacific-rim-japan-asia-214121#ixzz3n2cZj6tW>

Top trade officials from the United States, Japan and 10 Pacific Rim countries will be holed up in an Atlanta hotel this week to try to finish a giant trade deal against the backdrop of an increasingly raucous presidential campaign that could make it harder to win congressional approval.

If negotiators had completed the pact two months ago in Maui as hoped, President Barack Obama could have submitted the legacy-burnishing deal to Congress as early as December, setting the stage for approval before Iowa and New Hampshire hold their presidential nomination contests in early February.

Instead, the largest trade deal in history is facing the potential for increasing pushback from the left, with Democratic front-runner Hillary Clinton coming under intense pressure from progressives to reject the deal she promoted as secretary of state and Vermont Sen. Bernie Sanders — a staunch foe of the TPP — rising in the polls.

Now, the earliest the pact could get to Congress is winter or spring because of the timelines built into a law to “fast-track” approval of the deal, which lawmakers passed this summer. Under the law, Obama must notify Congress 90 days before signing the agreement and publish the trade agreement text 60 days in advance — a disclosure that’s guaranteed to touch off an avalanche of criticism from liberal quarters just as the race shifts into high gear.

With the exception of currency manipulation, where any TPP provision could be weaker than Clinton would like, her benchmarks are largely in line with goals that the White House has set for the pact.

Chief negotiators began meeting Saturday in hopes of whittling down the tough remaining issues to a manageable few for U.S. Trade Representative Michael Froman and ministers from the other countries to resolve when they take over the negotiations in midweek.

Right now, disagreements remain in auto talks involving the United States, Canada, Mexico and Japan, as well as in dairy market access talks between the United States and four other countries. Another big issue is the length of intellectual property protections for a new class of drugs known as biologics; the United States is under pressure to agree to far weaker protections than those in U.S. law, which provides 12 years of data protection for the drugs.

The delay in clinching a deal means union groups and other opponents have more time to lean on Clinton to oppose the pact, which could tie her hands to continue the Obama administration’s “pivot to Asia” as a security and economic counterbalance to China’s rising power, if she became president. And the groups have more time to build a case against the deal with Democrats in Congress.

“We have reached out to every single [Democratic] member in the House and Senate that voted for 'fast track,”” said Celeste Drake, the AFL-CIO’s trade and globalization policy specialist, referring to the new trade promotion law, which will allow Obama to submit the TPP pact to Congress for a straight up-or-down vote, without any amendments.

The largest U.S. labor group hasn’t formally taken a position on the trade deal and probably won’t until the text is formally released. But based on what is publicly known, the TPP is “something we could vigorously oppose,” Drake said.

The AFL-CIO has serious problems with provisions on labor, environment, currency manipulation and other areas in the pact and is letting members know those must be improved, she said.

Following intense criticism of the proposed pact from labor and environmental groups and many lawmakers in her party, Clinton has shifted to a neutral position, saying she will closely examine the final agreement to see what’s being done to crack down on currency manipulation, improve labor rights, protect the environment and public health and open new opportunities for small businesses to export overseas.

With the exception of currency manipulation, where any TPP provision could be weaker than Clinton would like, her benchmarks are largely in line with goals that the White House has set for the pact.

But if Clinton decides to disavow a final deal to shore up her chances of winning primaries in union-heavy states like Ohio in March and Pennsylvania in April, it could make it harder for Obama to get Democratic votes in the House to approve the deal. Only 28 of the chamber's 188 Democrats supported giving Obama the fast-track authority to conclude the agreement, which was passed by the exact number of votes needed for a simple majority, 218-210.

That means he would have to rely even more heavily on Republican support to get to the threshold for approval. Some see vulnerability in the GOP numbers, especially if Republican front leader Donald Trump remains atop the GOP presidential polls.

Unlike Clinton, the billionaire businessman is openly attacking the agreement, even before the ink is dry. He has called the pact "an attack on America's business" and criticized U.S. officials negotiating the deal as "weak and pathetic." If that view spreads among rank-and-file Republicans, the agreement could be in serious trouble.

Still, some dismiss the impact the presidential election might have on congressional consideration. The heavy slate of primaries in March means the nominations in both parties could be decided before Congress votes on the deal, said Scott Miller, a trade specialist at the Center for Strategic and International Studies.

"I think it's unlikely that Congress will take this up until we know who the nominees will be," Miller said.

The situation is similar to the House and Senate’s votes to normalize trade relations with China in 2000, which also was a presidential election year, Miller said. He expressed skepticism that the 28 House Democrats who defied union pressure to vote for fast track would balk at supporting the actual TPP pact.

Meanwhile, the White House is trying to build the case that the final agreement will be something both the right and left can love as well as a tool for anchoring American values in a fast-growing region of the world now dominated by China.

"TPP will deliver billions of dollars of tax cuts every year going forward," Froman said last week, referring to proposed cuts in tariffs that U.S. manufacturers and farmers face in the TPP countries.

Other benefits, he said, include stronger labor and environment provisions, the elimination of non-tariff trade barriers and precedent-setting rules in new areas, such as the flow of data over the Internet and state-owned enterprises, which are a formidable presence in Asian economies.

It's the success of those arguments, not presidential politics, that ultimately will determine the fate of the TPP, argued Miriam Sapiro, a former trade negotiator for the Obama administration who is now a non-resident senior fellow at the Brookings Institution.

"I think there are some Democrats who may find it easier to vote for the agreement if party leaders are also in support," but others will decide based on how they see it affecting their own states or districts, Sapiro said. "It's going to come down to what's in the agreement."
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