- TPP signoffs will take months or years for lawmakers review
- U.S., Canadian election politics may complicate ratification
A spirit of congratulations accompanied the Oct. 5 announcement of a deal on the Trans-Pacific Partnership. After five years and 19 formal rounds of talks, the largest regional trade agreement in history was a reason for celebration in the 12 countries involved -- which account for 40 percent of the world’s economy. Markets will be expanded, tariffs and duties lowered or erased, and the goal of free trade furthered in a large part of the world.
Still, businesses seeking to take advantage of the deal -- which could have benefits and fallout for automakers, cattle and dairy farmers and drug manufacturers -- will have to wait for months and possibly even years before they will see its effects. The deal must be ratified by all 12 nations, and in many, that will be a multi-step process. Most of the countries are expected to approve it, yet in the U.S. and Canada, election politics and divides over the accord could mean long delays and risks to passage.
Here is what will be required for ratification in the TPP countries, the expected timing of consideration and the anticipated outcomes:
U.S. - Democratic divide leaves approval uncertain
Passage of the agreement by the U.S. Congress will be one of the more contentious steps required before the TPP accord can take effect. Michael Froman, the U.S. Trade Representative, has said that the text would be made public in early November, starting the process leading to a congressional vote on legislation to implement the accord. But with trade expected to be an issue in the 2016 U.S. presidential campaign, the Obama administration may wait until late March or April to submit it to Congress, after the early rounds of presidential nominating contests for both parties are finished.
Democratic presidential candidate Hillary Clinton, a former U.S. secretary of state, has shifted her position on TPP and last week announced that she doesn’t support it. In a Democratic debate Tuesday night, she said that while she was secretary of state in the Obama administration, “I did say that I hoped it would be the gold standard.” The deal announced last week “did not meet my standards,” she added.
President Barack Obama has been pushing for the agreement and most Republicans in the U.S. Congress are expected to support the accord based on pro-trade principles. Yet some members of Obama’s party in Congress, who blame the North American Free Trade Agreement negotiated during Bill Clinton’s presidency for the loss of U.S. jobs, oppose TPP. The influence of organized labor also will be felt. Labor unions, which donate heavily to Democrats in congressional races, are pushing hard against the pact.
After passage of legislation in June granting the president fast-track trade-negotiation authority, Obama is allowed to submit trade agreements to Congress for an expedited, up-or-down vote without amendments. This procedure is expected to make it easier to win passage of TPP, yet with Democrats split, the outcome in Congress remains uncertain.
Canada - Pact is now an election campaign issue
The agreement also has become a campaign issue in Canada, ahead of the Oct. 19 parliamentary elections. Prime Minister Stephen Harper has sought to capitalize on TPP to promote his government’s economic record. Liberal Party leader Justin Trudeau, Harper’s main rival, has been ambivalent, saying he wants to see the text of the accord before committing to a stance.
Meanwhile, left-leaning New Democratic Party members hinted they may back out of the deal.
Japan - Approval is likely with Abe’s push
Both the lower and upper houses must ratify. They are currently on hiatus, with the next session set to start in January. Some are saying that Parliament may not start debating TPP until after the upper-house election, which will probably be in July 2016. Prime Minister Shinzo Abe’s coalition has majorities in both houses, and while there is some opposition to TPP, it would be likely to win approval with Abe a strong proponent of the accord.
The agreement is seen as widening Japan’s market for exports of cars and auto parts while giving Abe more ammunition to fight opposition in the agriculture sector to reforms he wants to make. Gaining overseas investment and expanding exports are key to his growth plans, known as Abenomics.
Japan’s minister in charge of TPP talks Akira Amari said last week that Japan would not accept any renegotiation of the agreement.
Australia - Government needs support of rivals
Both the lower and upper houses must ratify. After Thursday, there are four more weeks of action in the lower house and three in the upper house before legislators go on hiatus on Dec. 3 until February. So far, there is no indication whether the trade pact will be considered before February.
Prime Minister Malcolm Turnbull’s government needs the support of rival parties to pass legislation in the upper house. The main opposition Labor party has said that while it favors trade liberalization, it needs to study the text of the accord before it will decide whether to support TPP legislation.
Mexico - Pact likely to win approval in 2016
The upper house must ratify the agreement. President Enrique Pena Nieto is likely will send the accord to the upper house in the first half of 2016 for consideration in the legislative period starting Sept. 1, Economy Minister Ildefonso Guajardo told reporters Oct. 8, according to Mexico City newspaper El Financiero.
Pena Nieto’s party controls a near-majority in the upper house and the second-largest voting bloc belongs to a conservative, business-friendly party. The TPP is likely to win approval, according to analysts.
New Zealand - Government has support to pass the deal
The TPP accord will be reviewed by Parliament’s Foreign Affairs Select Committee, which will call for public submissions and consider an analysis prepared by government officials. The committee, which has a majority of government members, will make a recommendation to the Cabinet on whether the agreement should be ratified. As a second step, any changes required to domestic laws must be passed before the agreement can be ratified.
The government controls the committee, which is expected to recommend ratification to the Cabinet and the Parliament is expected to pass the legislation. Prime Minister John Key is urging the main opposition Labour Party to take a bipartisan approach and support the accord.
Vietnam - Approval could take 18 months to two years
The country’s Communist Party Central Committee will review the trade agreement. The National Assembly will then take up the pact for review and a vote. It is expected to be approved in 18 months to two years, the online news website VnExpress reported on Oct. 9, citing deputy trade minister Tran Quoc Khanh.
Singapore - TPP looks set for smooth passage
The Cabinet must first approve the agreement, and then, Parliament must approve legislative changes that may be required, according to the Ministry of Trade and Industry. The next parliamentary session, the first after Singapore’s general election in September, hasn’t been announced.
The ruling People’s Action Party holds more than 90 percent of the seats in Parliament after winning 70 percent of the vote, so passage of TPP legislation is expected to be smooth.
Malaysia - Pact probably will come up in 2016
The Parliament must ratify the agreement. Trade Minister Mustapa Mohamed said he plans in coming weeks to present the case for the TPP to lawmakers.
While there has been some opposition to the accord, Prime Minister Najib Razak’s coalition controls about 60 percent of the seats in Parliament, with only a simple majority needed for passage. It’s most likely to be considered in 2016.
Brunei - It’s for the Sultan to decide
In this monarchy, Hassanal Bolkiah, the Sultan who also holds titles of prime minister and minister of defense and finance, has wide influence and if he supports the accord, it is expected to be ratified.
Chile - Some opposition and no clear timetable
The country’s president, Michelle Bachelet, hasn’t given a time frame for considering the accord, saying it is now up to Chile’s Congress to review the TPP when it is “fully” finalized and subscribed. She spoke favorably of the agreement in Chile’s government Palace in Santiago on Oct. 9, saying TPP will open “new opportunities for our exporters, incorporating products that had been left out in previous accords subscribed with member countries of the TPP.” In Chile, the beneficiaries are expected to be in the agriculture and forestry industries.
There is some opposition to the accord, mainly from former student leaders who are now deputies and independent lawmakers on the left. Some lawmakers have complained about a lack of information and opportunity for input in the agreement.
Peru - Passage of the accord won’t be simple
Peru’s unicameral Congress will vote on the agreement. While the nation already has trade agreements with Chile, Mexico, Canada, the U.S. and Japan, and there hasn’t been much opposition expressed so far, that probably will change before the presidential and congressional elections in April. Peru’s governing party has a minority in the Congress, so passage of the accord won’t be simple.
Opposition parties are expected to raise concerns that the agreement will push up the cost of medicine, with such prices in Peru already among the highest in South America, said Gaston Pacheco, former president of the exporter association Adex. While Peru’s president Ollanta Humala will seek to ratify the accord before leaving office in July, it will probably happen under his successor, Pacheco said.