US Congress Doubts TPP Can Pass

U.S. senators from both parties provided a reality check Thursday to the Obama administration’s optimism overs its trade agenda following some progress in key negotiations with Japan.

The administration said last week it narrowed differences on access to Japan’s automobile and agriculture sectors, following President Barack Obama’s visit last week to Tokyo. The trade negotiations were a central issue in Obama’s visit, including in his lengthy discussions with Japanese Prime Minister Shinzo Abe.

Progress on market access to cars and agricultural products are key to moving forward on a broader Pacific rim free trade pact.

But Democratic lawmakers, including New York’s Sen Charles Schumer, told the administration’s top trade official Thursday that the 12-nation Trans-Pacific Partnership won’t win congressional approval anyway, unless it also addresses alleged currency manipulation by Japan.

Trade Representative Michael Froman conceded at a Senate Finance Committee hearing that currency issues have not been discussed yet in TPP talks.

The committee’s top-ranking Republican, Sen Orrin Hatch of Utah, questioned the president’s commitment to securing trade promotion authority. He said without it, the administration’s ambitious trade agenda “will almost certainly fail.”

Hatch is a co-sponsor of legislation to renew the so-called “fast track” authority of the president to negotiate a trade deal that would only face an up-or-down vote in Congress and would not be amended. Without that guarantee, it’s harder for the other countries involved in the talks to make tough political decisions.

“The political clock is ticking and it won’t be long before we lose the small window we have to pass significant trade legislation this year,” Hatch said at the hearing.

The TPP agreement is a key component of Obama’s efforts to boost American exports to the growing economies of Asia, and assert U.S. influence in the region in the face of China’s ascendancy.

But labor groups and lawmakers in Obama’s own Democratic Party oppose TPP, arguing it could leave U.S. workers vulnerable to competition from countries with lower labor costs. Many liberal-leaning groups have blasted the proposed deal as a secret plan to censor the Internet, undermine environmental protections and grant more power to corporations

The deadline for the pact, which would cut tariffs and other barriers to trade, has been pushed back. But Froman said the administration will work to conclude negotiations during 2014. The U.S. and Japan are by far the biggest players in the pact that would account for more than one-third of global trade.

Froman said while the recent talks with Japan didn’t result in an agreement between them, it was a “milestone” in tackling some sensitive market access issues.

“There’s further work to do certainly but we think there was enough progress to give further momentum to the TPP negotiations overall,” he said.

Sen Ron Wyden, D-Ore, the new chairman of the Senate Finance Committee, said the agreement needed “unprecedented transparency” to have any chance to succeed in Congress and gain support from the American people.

“Americans expect to easily find online the information they want on key issues like trade. Yet too often, there is trade secrecy instead of trade transparency,” Wyden said, noting the presence of several protesters at Thursday’s hearing dressed in bright green T-shirts with the phrase “Release the text” on the front.

Wyden, who has pushed for more transparency in trade deals, asked Froman to commit to making the text of a proposed agreement available to the public before Obama signs it. Froman made no promises. Instead he told Wyden he would “look at what past practice is, and on a bipartisan, bicameral basis work with you and the rest of this committee to determine what the right timetables are.”

Froman said his office has written blog posts and summaries that are available the public, and has even tweeted about ongoing negotiations.

A senior Japanese official responsible for TPP negotiations said Thursday at a Washington think tank there was “light at the end of the tunnel” after the recent U.S.-Japan negotiations. But Yasutoshi Nishimura, senior vice minister of Japan’s Cabinet Office, added that the outstanding issues remained difficult.

Matthew Goodman, a former White House international economic adviser, described the failure of the U.S. and Japan to reach at least an agreement in principle last week in their bilateral negotiations as a “missed opportunity,” particularly for Japan as Prime Minister Shinzo Abe looks to institute reforms to revive a long-stagnant economy.

AP