Freshly returned from his second New Year’s holiday in Hawaii, it would seem President Obama has had some time to think about his second term agenda and policy priorities. Sadly missing from the major items he listed in the White House briefing room before boarding Air Force One last week—immigration reform, energy production, climate change, and gun control—was anything about international economic policy: namely, trade policy and specifically, the Trans Pacific Partnership Agreement (TPP) negotiations.
Now after three years and 15 rounds of negotiations, the Obama White House has an opportunity to make good on its commitment to deliver a 21st Century high-standard, market-opening multilateral trade agreement of its own. After all, Obama’s much heralded post-election trip to South East Asia in November underscored the Administration’s commitment to remain a power throughout Asia. Regional trade agreements have been proliferating in Asia. The TPP has been front and center for U.S. trade policy since President Bush committed to it in 2008; then Obama, after a period of review, kicked it in to gear in late 2009.
The TPP includes 11 countries at present, including the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Canada, and Mexico. If implemented, this comprehensive agreement will reduce or eliminate tariff and non-tariff barriers for trade and investment among all the participating countries. It aims to cover industrial and agricultural goods, textiles, and apparel, and will address rules on intellectual property protection and trade in services. The negotiations also seek to address new issues involving competitiveness and the treatment of state-owned enterprises. Ambassador Ron Kirk, the current U.S. Trade Representative, has acknowledged the challenges of addressing such a cutting edge, first-of-a-kind trade agreement, stating in December 2012 that “the next 12 months are going to be critical, but we’re committed to doing everything we can to bring the TPP to closure.”
The business community hopes this will be the case, but remains skeptical that the Administration has not only the intellectual drive but also the political muscle to deliver a “next generation agreement,” given the strength of the protectionist and anti-trade wing of the Democratic party and the Administrations relatively lackluster trade policy track record over the first term. The White House ultimately did carry through in delivering to Congress the Bush Administration FTA’s with Colombia, Panama, and South Korea in 2011, and securing a favorable vote on PNTR for Russia last month, but by and large this Administration has left trade policy—not to mention the traditional U.S. leadership role within the WTO—on the back burner.
The U.S. should step up and make abundantly clear its commitment to leading and delivering a robust TPP agreement this year or early next year, on par with Obama’s policy priorities on immigration and gun control. By doing so, President Obama can prove that its “pivot to Asia” will have some meaningful economic repercussions for the U.S. and its important trading partners in the region. For the U.S. the TPP stands out as a unique model to forge market-opening liberalization with multiple like-minded countries—in this case, in the fastest growing economic region in the world. The promise of the TPP is that, if successful, it can and will be a template for an even larger trade pact in Asia and beyond—think Japan, Indonesia, the Philippines, and eventually China. Moreover, with a White House sure to be locking horns with Congress over the budget deficit, tax reform, and other major domestic “must do” policies over the next 24 to 48 months, an iron-clad, high-standard TPP deal—one that can be politically saleable to enhancing U.S. competitiveness—would likely get an enthusiastic thumbs up in Congress on both sides. Now that’s a political outcome worth fighting for in Obama’s second and final term in office.
P. Welles Orr is a Sr. International Trade Advisor at Miller & Chevalier Chartered.
Photo: Gobierno de Chile (cc).
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Getting It Done: U.S. Leadership and TPP Negotiations in 2013
January 10, 2013
Freshly returned from his second New Year’s holiday in Hawaii, it would seem President Obama has had some time to think about his second term agenda and policy priorities. Sadly missing from the major items he listed in the White House briefing room before boarding Air Force One last week—immigration reform, energy production, climate change, and gun control—was anything about international economic policy: namely, trade policy and specifically, the Trans Pacific Partnership Agreement (TPP) negotiations.
Now after three years and 15 rounds of negotiations, the Obama White House has an opportunity to make good on its commitment to deliver a 21st Century high-standard, market-opening multilateral trade agreement of its own. After all, Obama’s much heralded post-election trip to South East Asia in November underscored the Administration’s commitment to remain a power throughout Asia. Regional trade agreements have been proliferating in Asia. The TPP has been front and center for U.S. trade policy since President Bush committed to it in 2008; then Obama, after a period of review, kicked it in to gear in late 2009.
The TPP includes 11 countries at present, including the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Canada, and Mexico. If implemented, this comprehensive agreement will reduce or eliminate tariff and non-tariff barriers for trade and investment among all the participating countries. It aims to cover industrial and agricultural goods, textiles, and apparel, and will address rules on intellectual property protection and trade in services. The negotiations also seek to address new issues involving competitiveness and the treatment of state-owned enterprises. Ambassador Ron Kirk, the current U.S. Trade Representative, has acknowledged the challenges of addressing such a cutting edge, first-of-a-kind trade agreement, stating in December 2012 that “the next 12 months are going to be critical, but we’re committed to doing everything we can to bring the TPP to closure.”
The business community hopes this will be the case, but remains skeptical that the Administration has not only the intellectual drive but also the political muscle to deliver a “next generation agreement,” given the strength of the protectionist and anti-trade wing of the Democratic party and the Administrations relatively lackluster trade policy track record over the first term. The White House ultimately did carry through in delivering to Congress the Bush Administration FTA’s with Colombia, Panama, and South Korea in 2011, and securing a favorable vote on PNTR for Russia last month, but by and large this Administration has left trade policy—not to mention the traditional U.S. leadership role within the WTO—on the back burner.
The U.S. should step up and make abundantly clear its commitment to leading and delivering a robust TPP agreement this year or early next year, on par with Obama’s policy priorities on immigration and gun control. By doing so, President Obama can prove that its “pivot to Asia” will have some meaningful economic repercussions for the U.S. and its important trading partners in the region. For the U.S. the TPP stands out as a unique model to forge market-opening liberalization with multiple like-minded countries—in this case, in the fastest growing economic region in the world. The promise of the TPP is that, if successful, it can and will be a template for an even larger trade pact in Asia and beyond—think Japan, Indonesia, the Philippines, and eventually China. Moreover, with a White House sure to be locking horns with Congress over the budget deficit, tax reform, and other major domestic “must do” policies over the next 24 to 48 months, an iron-clad, high-standard TPP deal—one that can be politically saleable to enhancing U.S. competitiveness—would likely get an enthusiastic thumbs up in Congress on both sides. Now that’s a political outcome worth fighting for in Obama’s second and final term in office.
P. Welles Orr is a Sr. International Trade Advisor at Miller & Chevalier Chartered.
Photo: Gobierno de Chile (cc).
