Aug 2016
Tue, 23 Aug 2016

An Update on the TPP

Article by BGR Group
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This update on the Trans-Pacific Partnership (TPP) comes from the Asia Pacific Council of American Chambers of Commerce (APCAC’s) Washington DC-based lobbyists at BGR.

While most of the dialogue on Capitol Hill and the campaign trail continues to strike a pessimistic tone towards consideration of the Trans-Pacific Partnership (TPP) this year during the lame duck session of Congress, there is still a distinct possibility the administration will introduce implementing legislation to get the process started. A subsequent vote on the legislation would have to transpire during a narrow window in either December or the two weeks in January before the new Congress and president are sworn in. Assuming the implementing legislation makes it out of the House Ways & Means and Senate Finance Committees and moves to the floor for a full vote, the analysis remains the same with the key to passage being reassembling the coalition of lawmakers that voted for TPA in 2015. This number includes 190 Republicans and 28 Democrats in the House and 47 Republicans and 13 Democrats in the Senate. With support deteriorating among the bloc of 190 House Republicans that backed TPA, it will be incumbent on Speaker Paul Ryan (R-WI) and Ways & Means Chairman Kevin Brady (R-TX) to limit further defections or risk having to pick-up additional support from House Democrats, whose ceiling appears to be the 28 votes cast for TPA primarily by members of the New Democratic Coalition led by Ron Kind (D-WI).

The two primary issues weighing on consideration of the TPP are (i) continued opposition by both presidential candidates and influential members of Congress to a lame duck vote or the agreement more generally, and (ii) a shortened Congressional schedule dominated my time sensitive issues. Regarding the first point, Donald Trump, the Republican nominee, has been more direct in his opposition to the TPP widely criticizing the agreement and others, like NAFTA, repeatedly on the campaign trail. His running mate, Indiana Governor Mike Pence, is known as a free-trader but has since backtracked on his support for the TPP since joining the ticket advocating instead for a “country by country” approach more in line with Trump’s rhetoric (see Mike Pence Now ‘Questions the Wisdom’ of TPP, NAFTA). For Democrats, Hillary Clinton has moved across the political spectrum from once ardently backing the agreement to now opposing it, or at a minimum a lame duck vote, as a result of continued pressure from the more progressive elements of the Democratic Party, which were on full display at the Democratic Convention (see This Sleeper Issue Took Over the Democratic Conventions First Night). Like Trump’s VP nominee, Clinton’s running mate, Virginia Senator Tim Kaine, has also shifted his support by opposing bringing the agreement up for a vote in its current form even though he was one of the 13 Democrats who backed TPA in 2015 (see Clinton Names Kaine Her Running Mate).

The problem with this combined opposition from both party’s nominees is that it has not only emboldened the opposition in Congress but really undermined the impetus to bring the agreement to a vote before a new president is sworn in in January. One needs look no further than the Republican platform at the convention that boldly stated that trade deals “should not be rushed or undertaken in a Lame Duck Congress.” Democrats almost included a similar provision in their platform. In the Senate, Republican Majority Leader Mitch McConnell (R-KY) has not firmly stated whether he will bring the agreement up for a vote this year but noted that it is “probably not the best time” to do so. Part of the calculus will undoubtedly be whether Senate Finance Chair Orrin Hatch (R-UT), considered a lynchpin in ongoing negotiations, can reach a deal with the administration on the issue of IP protections for biologics. In the House, Speaker Paul Ryan recently warned that he did not have the votes to pass the TPP if brought to the floor (see Ryan: No Point in Lame Duck Vote on TPP Deal). Just recently, six members – Reps. Candace Miller (R-MI), Dave Trott (R-MI), Bill Shuster (R-PA), Tim Murphy (R-PA), Ed Whitfield (R-KY) and Ted Yoho (R-FL) – all of whom supported TPA in 2015, authored a letter urging the administration not to push for a vote this year. Their opposition is just another example of the continued erosion in support for the TPP among 2 the Republican caucus. Time will only tell whether this slide is merely election year posturing or substantive opposition.

With respect to the second point regarding the upcoming legislative calendar, Congress has a myriad assortment of issues it has to deal with before the end of the year, most notably the budget. We can expect a short term continuing resolution in September with the goal of an omnibus later in the year likely after the elections (i.e. December). This will undoubtedly consume a significant amount of time and effort along with other legislative priorities, which will be driven in large part by the outcome of the elections. Worth considering here is that Republicans will be reticent to push the TPP in this environment for the risk of a quid pro quo on outstanding Democratic priorities like the Supreme Court nomination of Merrick Garland, which GOP Senate leadership has vowed to block until after the elections, or other legislative priorities like gun control measures, which ground the House to a halt in June.

At the end of the day, it will be incumbent on the administration, supported by the business community, to drive the issue and press for a vote in the lame duck. The administration remains committed, as evidenced by President Obama’s remarks during the Singaporean Prime Minister’s recent visit to the U.S. “Right now, I’m president and I’m for it, and I think I’ve got the better argument,” he commented in response to the evolving dialogue surrounding the agreement. However, the business community will also play an integral role in pushing lawmakers to hold a vote. Administration officials, including USTR Michael Froman and Commerce Secretary Penny Pritzker, have been active in courting businesses and lining up their support before the lame duck. In recent Pritzker has met with the CEOs of Caterpillar, Boeing, Campbell Soup and a host of other large companies in recent months to discuss their the “efforts” they are going to make (see Pritzker: Businesses ‘Raring’ To Go on TPP). Other industry groups, like the National Association of Manufacturers, are ramping up their advocacy efforts using recent economic numbers to bolster their push. “While numbers continue to improve, the fact is that our economy remains nowhere near its full potential. To grow jobs in America, manufacturers need their products sold to more markets. Isolationist rhetoric will not help grow manufacturing jobs in the United States, but the right policies will,” Jay Timmons, CEO of NAM, recently commented (see Timmons: Isolationist Rhetoric Won’t Create More Manufacturing Jobs, but the Right Policies Will).

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