USA: After years of talks, 12 Pacific Rim nations, from Vietnam to Peru to the United States, reached an agreement in early October to create a vast, new trade bloc called the Trans-Pacific Partnership (TPP).
Leading the American negotiating team was the US trade representative, president Barack Obama’s longtime adviser Michael Froman. It was a huge victory for Froman.
Now he needs to get it through the US Congress as talks for the other major trade agreement on the table, the Transatlantic Trade and Investment Partnership (TTIP) with the EU, vies for his attention.
“I don’t think any other USTR could have done a better deal than he did,” says Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington DC. “The US did not accomplish all its objectives, but neither did any other country. It’s a compromise.”
The TPP text is 30 chapters of trade-related measures to break down barriers between member nations. It strengthens labor standards, reduces tariffs in the merchandise, agricultural and automotive sectors and harmonizes intellectual property rights in pharmaceuticals and entertainment.
The pact has been criticized by US liberals and conservatives. So approval by Congress is far from certain. “I doubt the agreement can pass without a strong performance by Froman and certainly extensive work by President Obama,” said Keith Maskus, director of the Program on International Development, the University of Colorado at Boulder.
The House and Senate may vote in spring of 2016 after a review period. “My view is that TTIP will not be concluded before the end of the Obama administration,” said Hufbauer. It’s hard to say what, if any, impact the TPP agreement could have on TTIP. “TPP was mostly about reducing tariffs and trade barriers,”concludes Maskus. “The TTIP is (so far) aimed mainly at regulatory harmonization, which is much harder to achieve. I suspect that TTP will offer some framework for guidance but won’t be that much of a roadmap.”