There’s Only a Slim Chance TPP Will Be Ratified This Year

05/05/2016

|

Alan Wolff

This article originally appears on Fortune.com on May 5, 2016

But it should be.

The web offers two definitions for the term “lame duck.” One refers to politicians who are still in office after an election that they did not run in—or lost. The other is historical—the term was used to describe a broker in the 19th Century London Stock Exchange who could not pay his debts. Both of these definitions apply to the future of the Trans-Pacific Partnership (TPP) Agreement: It’s not going to pass Congress before the election, and American trade policy will appear bankrupt the longer Congressional action is delayed.

The United States signed the deal at the end of last year, but still needs to implement it, which requires Congressional action. If it does not ratify, America will have defaulted on its promise to 11 trading partners who also signed the deal, and to the more than half dozen other countries that have expressed an interest in joining. So the question is: When can the agreement receive Congressional action? Not in the run-up to the election when Congress is focusing solely on that career-determining event, but afterwards, possibly during the post-election session.


Why can’t Congressional approval just wait until next year? That’s where presidential politics comes in. President Obama is strongly in favor of the agreement, as are most Republican members of Congress and a few dozen or more Democrats. The results of the Indiana primary and the campaign rhetoric to date make it plain that none of the frontrunner candidates wants to implement this trade deal, at least not as is. Donald Trump called TPP “a horrible deal,” and Bernie Sanders has said “kill it.” Hillary Clinton hasn’t completely opposed it, but has said she wants to see changes, which might require renegotiation.

The bottom line: The next president of the United States is not going to send the current agreement to Congress in its current form. It might take years to get to a new agreement, were that even possible, and that would be a long shot.

The rest of the world is not standing still while the United States is occupied with its domestic politics. Sixteen Asian-Pacific nations, with China being the largest, met last week in Australia to work toward a trade deal of their own—the Regional Comprehensive Economic Partnership (RCEP). It is a preferential trading arrangement that would create new discrimination against American trade in a large part of the world, and will fall far short of the new rules the U.S. has agreed on with its TPP partners. Absent TPP coming into effect, America will be stepping back from Asia, something the next president and Congress will come to deeply regret.

There is a narrow path forward for the TPP, and it has to be taken if the current Agreement is going to go into effect. Lame-duck sessions last typically no more than 30 days, and often less. That’s a very compressed timetable for getting any legislation through, especially when there is not yet a resolution of a few remaining issues key members of Congress have raised. It is incumbent on all who see merit in this agreement—who care about America’s place in the world and about access to foreign markets—to tell Congress to make sure that the TPP passes this year. This opportunity is not likely to come again anytime soon.

Alan Wm. Wolff is Senior Counsel with Dentons LLP, Chairman of the National Foreign Trade Council, and a former United States Deputy Trade Representative.