North American Leaders Champion TPP

By Shawn Greene

Posted: 26th February 2014 08:46

At the so-called “Three Amigos Summit” in Toluca, Mexico, celebrating the 20th anniversary of NAFTA this week, the leaders of Canada, Mexico and the United States have vowed to expand free trade agreements between North America and Asia while pushing for the successful conclusion of Trans-Pacific Partnership (TPP) negotiations this year.
 
Speaking at the summit, President Obama expressed a determination to keep TPP progress on track despite many in the U.S. Congress indicating they will refuse to support a renewal of so-called ‘fast-track’ negotiating authority, or trade promotion authority.
 
Historically, trade promotion authority has been necessary for U.S. Presidents to successfully negotiate multi-nation international trade agreements, and ultimately submit them to Congress for ratification or rejection without an opportunity to amend or filibuster the agreement. For an agreement as large and complex as the TPP, presidential fast-track authority would likely make or break the agreement, as any Congressional amendments to the agreement would jeopardize its ratification in other negotiating countries.
 
“What I’ve said to President Peña Nieto and Prime Minister Harper is that we’ll get this passed if it’s a good agreement,” President Obama said during an end-of-summit news conference with his North American counterparts.
 
RELATED: TPP Negotiations Conclude with No Deal in Sight
 
“The key at this point is to make sure that our countries, which hold ourselves up as champions of free trade, resolve our legitimate national interests in these negotiations so that we can present a united front against a number of other participants in the TPP negotiations who don’t have as much of a tradition of free trade. And part of our goal here is to make sure the Asia-Pacific region – which is growing faster than anyplace else in the world, has a larger population than anyplace else in the world – that they have a model of trade that is free and fair and open…and we can only do that if we raise the bar in terms of what our trade models look like,” he continued.
 
After President Obama failed to directly mention the TPP a single time in his annual State of Union address last month, some speculated that Congress’ vocal opposition to the trade agreement had tempered Obama’s resolve to conclude negotiations this year and begin the ratification process. Comments by all three leaders at the bilateral meeting this week, however, reaffirmed their collective commitment to the TPP agreement.
 
“I’ve said this to some of my own constituents who are opposed to trade: Those who are concerned about losing jobs or outsourcing need to understand some of the old agreements put us at a disadvantage. That’s exactly why we’ve got to have stronger agreements that protect our intellectual property, that open up markets to our agricultural products; that make sure that when it comes to government procurement or sovereign wealth funds in these other countries, that they’re not taking advantage of our business and preventing us from competing there. That’s exactly why we’ve got to get this done. And I’m very appreciative of the shared vision and commitment that Prime Minister Harper and President Enrique Peña Nieto have on this issue,” President Obama explained.
 
Canada and Mexico on Board
 
Both PM Harper and President Peña have indicated that their administrations support the Trans-Pacific Partnership, but have been relatively quiet about participation in negotiations so as to avoid attracting vocal domestic opposition to the TPP akin to that seen in the U.S. in recent months.
 
“On the issue of the Trans-Pacific Partnership, as I said, we are wanting to see and committed to seeing a good, comprehensive Trans-Pacific Partnership trade agreement. I think it’s in all of our interests for the reasons that have already been laid out. That said, the government of Canada’s position is always clear in these matters that we will only come to an agreement when we are convinced the agreement is in the best interest of Canada. And we will stay at the table as long as it takes to get to that particular situation,” remarked Canadian Prime Minister Stephen Harper.
 
RELATED: Vietnam and the TPP Traverse Rough Seas Towards Promised Land
 
“We are in agreement to say that we can still grow the success of NAFTA, to implement new ways, for instance, in regard to the Trans-Pacific alliance. And so these negotiations should be for the best. We need to create employment. We all agree that there is enormous potential to build on the success of NAFTA in new ways, for example, most notably through the Trans-Pacific Partnership. We’re therefore focused on bringing these negotiations to a successful conclusion. That’s why our government will continue to expand trade with our two core trading partners in North America, in the Asia Pacific region generally, and around the world,” he added.
 
President Peña Nieto echoed a similar sentiment, “The Mexican stand has been very clear, and specifically our take on the TPP have always stated it is of the interest of Mexico. We have been part of the negotiation rounds to eventually reach an agreement on this important opportunity the TPP offers. We can expand the potential of North America into the Asia Pacific region. Mexico would do its best for the sake of Mexico to be on the side of the solution. We will overcome disagreements and eventual roadblocks that the negotiation rounds present.”
 
“Mexico has made a commitment and has shown political will to be part of the Trans-Pacific Partnership. We hope that the deal happens. That is the Mexican stand, and we will work to the best of our ability to reach this goal,” President Peña added.
 
Slow but Steady Progress
 
Despite making some notable progress towards finalizing negotiations last year, TPP negotiators faced a considerable setback after WikiLeaks released several secret TPP documents including the negotiated draft text for the TPP intellectual property rights chapter, internal government commentary on the state of negotiations and a spreadsheet indicating each country’s negotiating position on several TPP issues.
 
The high-profile release of these documents, and subsequent domestic opposition to U.S. participation in the TPP, resulted in President Obama scaling back vocal support for the trade agreement. Since the leak, the most significant threat the TPP has faced has come from within the United States, with 150 House Democrats publicly declaring their opposition to TPP fast-track authority last November.
 
RELATED: Wikileaks Releases New TPP Documents
 
“I am against fast-track, everyone would be well advised just to not push this right now,” Senate Majority Leader Harry Reid said last month. With mid-term elections looming this November, vocal Democratic opposition to the TPP is thought to stem primarily from public hostility towards the agreement, rather than sincere disapproval.
 
Despite these setbacks, many supporters of the TPP, including President Obama, continue to be optimistic about the TPP’s chances for success and ultimate ratification.
 
“We’ve agreed to keep working to complete negotiations on the Trans-Pacific Partnership, including strong protection for our workers and the environment, so that we can compete in the fast-growing markets of the Asia-Pacific. And because it will grow the U.S. economy and make the United States more attractive to investment,” President Obama said during the conference.
 
Whatever this year may hold for TPP negotiations, observers can expect a clearer indication of how fast-track authority and overall negotiation progress will proceed shortly after the November U.S. election, and ministerial meetings scheduled later this month.
 
This article was first published on Asia Briefing.
 
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
 
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