Canadian Manufacturing

President Obama wins authority to fast-track Trans-Pacific Partnership

Countries can now prepare serious offers in the final stages of negotiations for a deal covering 40 per cent of the world's economy

WASHINGTON—The on-again off-again negotiations for the biggest trade agreement in history are about to get serious, foreign diplomats in Washington said June 23.

They were reacting to a U.S. Senate vote that increases the chances of success for the Trans-Pacific Partnership, a pact between 12 countries including Canada, the U.S., Mexico and Japan.

A bill to give President Barack Obama so-called fast track negotiating authority cleared the 60-per-cent vote threshold to override a filibuster in the U.S. Senate, paving the way for its adoption by a simple majority as early as Jun 24.

In practice, the vote means other countries can now prepare serious offers in the final stages of negotiations for a deal covering 40 per cent of the world’s economy.

“This was essential for us to proceed and move forward,” said Peru’s ambassador, Luis Miguel Castilla, at a meeting of the Atlantic Council think-tank.

Chile’s Juan Gabriel Valdes said it would have been practically impossible to close the deal without fast track. “But with this … we are hopeful we will see a happy ending.”

That also appears to be the Canadian position—although there was no one from Canada speaking at the event and a June 23 government statement didn’t say much.

However Ottawa has signalled in the past that, before negotiating the most sensitive areas, it wants some assurance that a final deal might make it through the U.S. Congress.

The sensitive spots for Canada include agriculture.

American negotiators want to pry open the tightly controlled Canadian dairy system that offers protection for the domestic industry, but results in higher prices at the grocery store and less foreign offerings.

Other countries have their own concerns.

For Peru and Chile, the ambassadors mentioned drug prices as a main concern. One of the thorniest issues has been the pharmaceutical industry’s push for broader patent protection.

Negotiators have been putting off some difficult conversations.

“You do the easy parts first,” said Singapore’s Ashok Kumar Mirpuri.

“You leave the difficult parts for those final tradeoffs—and that’s where (this fast track) becomes very important.”

Fast-track authority, said several ambassadors, assures them that the political risks they’re taking won’t be for nothing, destined to die on the U.S. Senate floor.

These tradeoffs will already be a difficult sell at home. In Canada, for instance, successive governments have left the dairy system alone for fear of incurring rural voters’ wrath.

Canada is not alone in those concerns.

“We have political cycles, we have political circumstances,” the Chilean ambassador said. “This is a debate that is going to be tough in our own congress.”

The White House expressed sympathy Tuesday for other countries’ positions. Obama spokesman Josh Earnest acknowledged concerns about making a deal that might be rewritten later by 535 members of the U.S. Congress.

Fast-track authority, more formally known as Trade Promotion Authority, has been a key ingredient in past trade deals like NAFTA. It instructs the president on what to seek in a deal, on the understanding that Congress will agree to vote Yes or No later and relinquish its right to amend it.

The White House has taken a beating during the fast-track debate, with many of the blows coming from its own side. The Democratic party that was skeptical of free trade in the Clinton era has become openly hostile.

Democrats appeared to have derailed Obama’s trade agenda earlier this month, but provided just enough votes to move it forward Tuesday.

Unions warned that free-trade deals have consistently outsourced jobs and lowered wages for middle-class workers. They painted lawmakers as puppets of corporate interests.

“Today, a majority of Republicans and 13 Democratic senators showed beyond doubt that they’re on the side of the one per cent, not ordinary Americans,” said a statement from the Communication Workers of America.

A Democratic senator from the old Ohio industrial belt fumed of another blow to the American worker.

“How shameful,” said Sherrod Brown. “We’re making this decision knowing that people will lose their jobs because of our action.”

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