[CTC] Froman Signals Openness To Fixing TPP Problems Without Reopening Text

[Arthur Stamoulis]

Froman Signals Openness To Fixing TPP Problems Without Reopening Text
March 18, 2016
 
U.S. Trade Representative Michael Froman on Friday (March 18) said publicly for the first time that the Obama administration is open to exploring potential fixes for objections raised about the Trans-Pacific Partnership by U.S. companies and their congressional supporters, including on the monopoly protections for biologics, but without reopening the text of the deal. 
 
“We made it clear we do not believe this [TPP deal] can be renegotiated, which doesn't mean we can't address outstanding issues through a number of mechanisms that we have,” Froman said at an event in Brussels organized by the German Marshall Fund. He did not specify which mechanisms could be used, although some tools under discussion are side letters, implementation plans and enforcement plans.
 
“We're working with stakeholders, whether it's in the pharmaceutical and biotechnology area, or in some of the agriculture areas, or financial services, where issues have come up, to see what we can do to address their concerns,” he added.
 
Froman offered this response to a question on whether future administrations could renegotiate the TPP to get a better deal.
 
Froman did not specify which agriculture issues he was referring to. The main complaints by lawmakers have focused on the carveout of tobacco control measures from investor-state dispute settlement as well as inadequate market access outcomes on dairy and rice.
 
His comments are the latest signal that the administration is willing to engage seriously on addressing stakeholders' objections in order to meet President Obama's goal of having Congress pass the TPP this year. One business source said this was the message conveyed by Froman, White House Chief of Staff Denis McDonough and National Economic Council Director Jeffrey Zients in a March 14 meeting <http://insidetrade.com/node/153123> with Senate Finance Committee Chairman Orrin Hatch (R-UT).
 
However, there is no agreement on the substance of how these objections would be fixed, sources said. Another informed source said the administration has tabled no proposals to Hatch. The fact that there is no agreement on how to resolve the Finance chairman's objections was also emphasized by a Hatch aide in a March 17 statement to Inside U.S. Trade. 
 
Business sources this week said they are aware of this new opening, but not of how hard and quickly the administration is trying to fix these problems. Some sources expressed worry that the fixes may not be quick enough to sufficiently prepare the ground for a lame-duck vote. Nevertheless, the U.S. Coalition for TPP met on March 18 to work out the logistics of its lobbying campaign for TPP, which at this point is focused conveying the perceived benefits of the deal to Congress instead of calling for a quick vote. 
 
In the statement, the Hatch aide said the chairman always maintains an open line of communication with the administration on trade issues, including the TPP. “The Chairman continues a rigorous review of the TPP and remains hopeful that the Obama Administration will work with him and members of Congress to resolve outstanding concerns to ensure TPP will garner strong bipartisan support. How congressional concerns will be resolved, however, has yet to be determined,” the aide said.
 
In another sign of flexibility, Treasury Secretary Jack Lew on March 16 signaled <http://insidetrade.com/node/153129> that the administration was open to addressing complaints by U.S. financial services firms and their congressional allies that the TPP's ban on local data storage requirements does not extend to their sector.
 
Lew indicated that the administration may be willing to take a different stance on this issue in future trade agreements than in TPP. He said the TPP cannot be changed since the deal has been signed, but held open the possibility of a side agreement to TPP, although he downplayed the likelihood of that.
 
 
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