By Scott Miller & Matthew P. Goodman
The Trans-Pacific Partnership (TPP) is the central economic component of the administration’s pivot, or rebalance, to Asia. A completed TPP would create the largest free-trade area in which the United States participates, representing 40 percent of all U.S. merchandise trade, with potential for expansion to other regional economies. TPP would help establish a modern set of commercial rules for the Asia Pacific, where U.S. firms have a large and growing stake. And TPP reinforces the American presence in the region, “embedding” the United States as a Pacific power. Without TPP, regional actors will view the pivot with skepticism, as primarily a military endeavor.
TPP negotiations are now nearing the end of a long arc. The George W. Bush administration joined the P-4 (Singapore, Brunei, Chile, and New Zealand) in 2008 to launch TPP. The Obama administration embraced the initiative in early 2010, and helped expand the deal to 12 Asia-Pacific economies. Talks are now nearing completion: during the Asia-Pacific Economic Cooperation (APEC) meetings in November 2014, leaders stated, “with the end coming into focus, we have instructed our Ministers to make concluding this agreement a top priority.” Negotiations slowed somewhat in 2014 over U.S. – Japan market access issues, but “end game” dynamics are now in the forefront.
What is needed to conclude TPP in 2015?
For the United States, trade agreements enter into effect once the U.S. Congress passes legislation to implement the provisions negotiated by the executive branch. That action is the end of a process that begins with building domestic political support for the policy. Advocates in the business community and elsewhere have a role, but if history is any guide presidential leadership is fundamental to making the case to the public and managing the political conflicts that are always a part of trade policy.
Immediately following the November midterm elections, incoming Senate Majority Leader Mitch McConnell (R-KY) and Speaker John Boehner (R-OH) made it clear that trade agreements like TPP were an area of potential cooperation with the president. During President Obama’s first term, the implementing bills for free-trade agreements (FTAs) with Colombia, Panama, and South Korea passed the Republican-controlled House by comfortable margins, with over 200 Republicans and 30–60 Democrats voting in favor. This 2011 success gave TPP talks momentum, with Canada, Mexico, and Japan deciding to join the talks shortly after the FTAs passed.
Voting patterns indicate that trade policy remains an issue that divides Democrats and unites Republicans. The president must actively manage his party’s politics while cooperating with Republican majorities in Congress who will provide the majority of the votes. It’s never easy to advance an issue that divides your usual allies and unites your usual opponents, but there is no alternative scenario.
In short, the next step belongs to the president. He must engage the public on the issue, underscoring its importance to the economy and, more broadly, the U.S. role in the world. And he must manage the delicate relations with Congress, navigating past areas of conflict to form a durable base of support for his agreements. Presidential leadership will resonate in other capitals, especially Tokyo, where trading partners are looking for evidence of an adequate political consensus in the United States.
What is the best way to build this political coalition? For 40 years, the preferred approach has been to advance general legislation that articulates priorities and creates House and Senate rules for expedited consideration — known as “fast track” in the Trade Acts of 1974 and 1988, and trade promotion authority (TPA) in the Trade Act of 2002. The procedural rules become useful when it comes time to pass implementing bills, but the political value of legislation is the way it builds support among members of Congress and ultimately the American people for the administration’s trade policy. A grant of TPA further reassures our negotiating partners that the United States is ready to “do business.”
A realistic timetable for TPA is around six months. The 1988 bill took five months, from introduction to presidential signature; the 2002 bill took 10 months. The 114th Congress doesn’t need to start from scratch: Sen. Orrin Hatch (R-UT), incoming chairman of the Senate Finance Committee, and his staff were part of the Baucus/Hatch/Camp TPA bill introduced in January 2014. Staff continuity at the Ways and Means and Finance Committees will help. Even with Republican majorities in both chambers, there will be an effort toward a bipartisan bill, not just because of the 60 – vote threshold in the Senate but because the president and Congress will each have policy priorities, and legislators will work to find the right balance.
Even at this late stage, a successful grant of TPA would catalyze the negotiations and give momentum for concluding the talks. Presuming a midyear passage of TPA, TPP could be concluded in the fall and an implementing bill presented to Congress later in 2015.
Mr. Scott Miller is a senior adviser and holds the Scholl Chair in International Business at CSIS. Mr. Matthew Goodman holds the William E. Simon Chair in Political Economy at CSIS, with particular emphasis on Northeast Asia. Follow Matt on twitter @MPGoodman33.
This article first appeared in the new CSIS publication Pivot 2.0: How the Administration and Congress Can Work Together to Sustain American Engagement in Asia to 2016. Read the full report here.
Matthew P. Goodman
Matthew P. Goodman is senior vice president and William E. Simon Chair in Political Economy at CSIS, with particular emphasis on Northeast Asia.
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