Trans Pacific Partnership Negotiations Struggling

22 October 2014 Manufacturing Industry Advisor Blog

As election season kicks into high gear, one thing is clear: there will not be any movement on manufacturing legislative policies on Capitol Hill until the “lame duck” session in December, if then. On the campaign trail, manufacturing issues, which are usually framed as economic growth or jobs issues, have to compete for attention with a host of other topics, including new military engagements in Iraq and Syria and the Ebola crisis in Africa.

Regardless of which party wins the Senate majority this November, there will be at least one piece of the President’s agenda that will continue to move forward away from Capitol Hill: continued negotiations of the Trans Pacific Partnership (TPP). Although it is not yet clear whether the current 113th Congress or the new 114th Congress will be in session when TPP negotiations reach their peak, one thing is known – if done poorly, this trade deal could have unfortunate consequences on American manufacturing.

The TPP is intended to be among the largest multilateral trade agreements with Pacific nations. The countries involved in the negotiations, besides the United States, include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The U.S. goal in the TPP negotiations is to unlock opportunities for American workers, families, businesses, investors, manufactured goods, farmers, and ranchers by providing increased access to the fastest-growing emerging Pacific-rim markets.

Internal trade policies – and politics – of the participating nations are major considerations. The effort has not been helped by the highly charged domestic political issues that surround free trade issues in the Pacific. For example, Japanese Prime Minister Shinzo Abe of Japan has taken a strong leadership position by offering concessions on farming issues, and during the UN General Assembly, he began and ended his trip to New York with bold pledges to help advance stalled TPP talks. But mid-week, after U.S. officials still accused Tokyo of moving too timidly on opening up Japan’s markets, Japan’s chief negotiator felt it necessary to walk out of a meeting with his American counterpart to demonstrate that Japan had reached a breaking point, leaving the TPP agreement’s fate as uncertain as ever. And domestically, the President has to face free-trade hostile domestic politics, including the Senate, which has the authority to approve or disapprove a trade treaty that the President signs.

The United States, under President Obama, has begun to focus more intently toward East Asia. Trade deals such as the TPP could prove useful in enhancing and consolidating the economic power of the Pacific rim countries. Now it is more important than ever that the President and his negotiating team focus on their economic ambitions in Asia with the TPP. If the President and his negotiators come back with an indifferent trade deal, it could be unfortunate for American manufacturing jobs and businesses.

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