The US Administration may delay a formal Congressional debate until after the 2016 elections

The US Administration may delay a formal Congressional debate until after the 2016 elections

Last week, on 5 November, the Trans-Pacific Partnership (TPP) published the detailed text of the agreement that its 12 potential members had reached exactly a month earlier. Publication coincided with a number of events, all of which illustrate how unpredictable the approval of the deal is likely to be by those countries’ legislatures. Mike Flanagan takes a look at the questions they raise.

1: Do all the members still want to sign?

Shortly after negotiations were concluded last month, Canada threw out the politicians who’d agreed the deal. The newly elected Prime Minister, Justin Trudeau, said on 5 November that the just-released details showed how "the previous government had failed to be transparent through the entirety of the [TPP] negotiations" – and pledged his party to defending "Canadian interests during the TPP's ratification process – which includes defending supply management, our auto sector, and Canadian manufacturers across the country."

2: Do those details support claims made about the TPP?

Long-standing opponents, from Friends of the Earth to the Alliance for American Manufacturing, immediately declared the text shows the deal is worse than their wildest dreams.

But not all those claims are based on the published details. US Presidential candidate Bernie Sanders, for example, claimed the text allowed "foreign corporations to sue [US] governments…for passing an increase in the minimum wage." This was a common allegation before the text was published: the detail explicitly bans companies from lawsuits of the sort Sanders quotes. Sanders hasn’t read the agreement – and he’s certainly not the only person opinionating without knowing what he’s talking about.

3: Are comments consistent?

The loudest opposition so far is from left-leaning activists who claim the deal has sold out to big corporations. But businesses are reacting in surprisingly different ways. America’s National Council of Textile Organizations (NCTO), for example, said that, subject to further scrutiny, "we feel that the US government was able to achieve a well-balanced outcome for all parties, including US textile manufacturers." But the Ford Motor Company, and steel companies in the Alliance for American Manufacturing, now say they think the TPP’s bad for them. Influential US Senator Orrin Hatch, claiming to speak for American pharmaceutical companies, thinks the TPP’s reduction in patent protection for drugs probably means the deal needs to be renegotiated.

4: Who gets to approve the TPP?

When the deal was announced in October, the two front-runners in the US Presidential election – the Democrats’ Hillary Clinton and the Republicans’ Donald Trump – opposed it. But the TPP needs to be approved by members of the US Congress and the legislatures of the other TPP democracies. Neither Trump nor Clinton – nor the NCTO, nor the Ford Motor Company, nor Friends of the Earth – are in a TPP legislature. The only views that really matter are legislators. And in the US, the Republicans – who generally favour the TPP – control both the Senate and the House of Representatives.

5: How will the US Congress vote?

With all its House of Representatives up for re-election in 2016, along with one-third of US Senators, forget about naïvely cynical predictions like "the way their campaign funders tell them." Most politicians facing an election will vote the way they think is most likely to get them re-elected.

6: So how do Americans want their politicians to vote?

Though most lobbyists – for and against the TPP – feel strongly about it, my experience recently is that they’re about the only Americans who do. Though most Americans are unhappy at the number of jobs they think have moved to Asia, few believe the TPP will make matters significantly worse – but even fewer think it’ll make things better. American opinion-formers need to digest those 6,000 pages of detail, and no doubt a few will find within them some new arguments that will hit home. Any “killer” discoveries could go either way – and, as Presidential candidate Sanders showed, real analysis of the text may demonstrate the opposite of enthusiasts’ knee-jerk claims.

How would I bet on the outcome?

As far as the US is concerned, I still suspect there are two most likely possibilities:

  • The US Administration will delay a formal Congressional debate until after the 2016 elections, when there’s a brief period (the so-called "lame duck" Congress) when the current Senators and Representatives can still vote laws through. There is probably a majority for the TPP in both the Senate and the House of Representatives: but it’s highly unlikely many will vote for the TPP while they’re trying to get elected; or 
  • Congress votes to send the whole deal back for re-negotiation, and the TPP partners will find a different way of creating some kind of trade deal. Which could take years.

As for the other partners, I very much doubt the legislatures in Canada, Australia and New Zealand will all approve the current deal. In all three countries, public opposition is a lot more fierce than in the US.

But I could very easily be wrong. This is not about what’s right for the US (or Canadian, or Japanese or…) economy. It’s about what legislators think will motivate voters during a politically fraught election.

I’d have more confidence betting on a horse I’d chosen blindfold, sticking a pin in a list of runners. Any buyer taking any decisions now about apparel sourcing strategy on the basis of when they think the TPP will become effective is gambling with other people’s money.