The Trans-Pacific Partnership (TPP) is a house of cards. The blockbuster trade agreement, spanning the Pacific Rim and covering a score of topics, is the subject of intense negotiations in this week of Asian summitry. But its fate will depend on the brutal partisan domestic politics of Washington, DC.
President Barack Obama needs to be granted fast track trade promotion authority from the US Congress to secure the passage of the TPP. Yet, he has faced opposition in Congress from Democrats and from some quarters of the Republican Party. The TPP is stuck in the gridlock of DC politics, and the triumph of the Republicans in the midterm elections has further complicated the progress of the agreement. The balance of power has shifted towards the Republicans, with the party seizing control of both the House of Representatives and the Senate. President Obama has sought to encourage the new Republican-led Congress to work with him:
“I'm eager to work with the new Congress to make the next two years as productive as possible. I'm committed to making sure that I measure ideas not by whether they are from Democrats or Republicans, but whether they work for the American people.”
Obama will be dependent upon a Republican Congress, which hates his presidency with a deep and abiding passion, in order to win support for the TPP. But Republican Senate Majority leader Mitch McConnell has emphasized that he could collaborate with President Obama on trade agreements:
“The president and I were just talking about that right before I came over here. Most of his party is unenthusiastic about international trade. We think it's good for America. And so, I've got a lot of members who believe that international trade agreements are a winner for America. And the president and I discussed that right before I came over here, and I think he's interested in moving forward. I said, 'Send us trade agreements. We're anxious to take a look at them.”
But others, like Republican Senator Orrin Hatch, have demanded that trade promotion authority provide new oversight mechanisms in respect of the full implementation and effective enforcement of trade agreements. Hatch has argued: 'Our nation as a whole wins by tearing down trade barriers.' He has also maintained: 'If we don't work to bring these barriers down, we are putting American jobs at risk, because our international allies are working hard every day to lower them for their people.'
Niels Marquardt of the American Chamber of Commerce in Australia is optimistic that a Republican Congress will support fast track authority for the TPP. He told the Australian Financial Review:
“Generally, speaking, the Republican Party is more unambiguously supportive of free trade and more likely to be supportive.” He has maintained,”The Congress has been very obstructionist to the President's agenda, but going into 2016, when they will have the biggest prize on the table -- the Presidency, I think both parties are going to want to show that they are able to govern and hopefully the TPP is one of those things they can agree.”
Such analysis is too simplistic. There is certainly one faction (associated with big business and the US Chamber of Commerce) supportive of the TPP, but there are a number of fractures and splits within the Republican Party on the issue.
Public Citizen, a civil society group, has commented that “the GOP takeover of the US Senate probably reduces the chances that President Barack Obama gets Fast Track at all before his presidency is over or that a deal is completed on the TPP.” The group continued:
“A significant bloc of House GOP does not want to delegate more power to Obama, especially as the GOP has been attacking him as the 'imperial president' who grabs legislative authority for his own. Tea party activists oppose Fast Track per se and anything that empowers Obama, which leaves GOP lawmakers who support Fast Track exposed to the dreaded tea party primary threat. To make political matters worse, House GOP lawmakers know that even if the GOP votes were available to pass Fast Track on a party line vote, almost no Democrats will vote to give their own president such authority, so any fallout from future trade pacts would be owned solely by the GOP.”
Lori Wallach, Director of the group’s Global Trade Watch branch, has observed: “There is a Wall Street versus Main Street split in the Republicans.” While “the more conservative and the more moderate of the Republicans are against fast track,” she suggests that “corporate, ‘main’ Wall Street contingent are for fast track”.
There remain reservations in several Republican quarters and in influential think tanks like the Cato Institute, about the wisdom of including investor-state dispute settlement within the TPP. Defenders of the free market and free enterprise within the Republican Party are suspicious of corporate privileges being accorded to foreign investors. Members of the Tea Party are aghast at the prospect of anonymous international tribunals ruling on US laws and policies. Another group would like to deny Obama any victory whatsoever, and will do their best to ensure that his remaining two years are a lame-duck period.
Moreover, Democrats harbour substantial criticisms of the TPP. The Ways and Means Committee's ranking Democrat, Congressman Sander Levin, presented a report to the Council on Foreign Relations reviewing the areas of debate and conflict in the TPP negotiations. The report highlights significant concerns about workers' rights, environmental protections, access to medicines and human rights.
Levin issued a sober press release at the end of the Ministerial talks on the TPP last month in Sydney. He observed: “With substantial work having been done, going forward there needs to be a sharp focus on the what, not the when”. In his view, it is the substance of a TPP agreement that matters. Echoing the concerns of the economist Joseph Stiglitz about the TPP benefiting corporate elites, he stressed: “The goal must be to ensure that the potential benefits of trade are spread broadly to the many, not just the few.”
There remains widespread public opposition to the fast tracking of the TPP. A broad coalition of labour unions, environmental activists, public health advocates and digital rights champions have mobilised against it.
President Obama will need the skills of a political operative like the mythical Frank Underwood to secure fast track authority from the US Congress to smooth the passage of the TPP. Otherwise, it could well collapse like a house of cards.