U.S. President Barack Obama might have gained Congress' hard-won support to speed up the passage of the proposed Trans-Pacific Partnership, but the biggest impediment to the deal among its 12 member-nations is its sheer size. After talks between representatives broke down in Hawaii on Friday, the window for immediate passage of the largest multinational trade deal in history is closing fast.
“What happened in Hawaii was that key countries like Canada, which doesn’t want to liberalize its dairy trade, and Japan, which has its own issues on certain agricultural markets, aren’t ready to come to an agreement that locks them into a deal,” said Jagdish Bhagwati, an economics professor at Columbia University who is an outspoken proponent of free trade.
The massive size and scope of the deal has made TPP ratification difficult. Talks began a decade ago, but President Barack Obama has made closing the agreement a capstone goal of his administration -- but time is running out. Talks are scheduled to reconvene in November, which doesn’t give the U.S. Congress much time to give the up-or-down vote before heading home for the holidays and sharpening their sticks for the 2015 presidential race. Obama won fast-track authority back in May, which prevents Congress from tinkering what whatever TPP deal is made.
Canada and Japan are important players in the 12-nation trade pact that would put nearly 40 percent of global trade under a massive set of rules aimed at spurring growth and closer trade ties between the Asia Pacific region and Western Hemisphere countries. But with the U.S. presidential elections season fast approaching, and Canada holding general elections in October, talks could wind up being delayed for a year if a deal isn’t worked out within weeks.
Talks fell apart Friday over disagreements in five key areas: ongoing differences between Japan and the U.S. over the farming and automotive sectors; Australia’s desire for more access to the protected U.S. sugar market; New Zealand’s demand for better access to Canada and U.S. dairy markets; Mexico’s dispute over a Japanese demand to integrate Japanese car companies’ massive Asian auto parts supply network into the TPP deal; and a disagreement Australia and others have over U.S. pharmaceutical patents.
Out of the 12 member states, half of the member states have issues that still need to be worked out: the U.S., Canada, Japan, Australia, New Zealand and Mexico.
Talks between the U.S. and Japan were tainted, too, by a set of documents released Friday by the transparency group WikiLeaks that revealed secret memos detailing U.S. spying on Japanese firms and lawmakers. The revelations included details about trade negotiations and climate strategy.
Bhagwati says its likely Canada will hold back on any commitment until after its October 19 general elections, but some say ratification has to come sooner than that.
"There is a finite window, I think, where if you can't complete the deal in that time, it becomes more difficult for the U.S. and others," New Zealand Prime Minister John Key said Monday at a press conference.
TPP advocates are concerned that if representatives don’t meet again before their scheduled November session – as early as later this month – then the talks will be scuppered by the U.S. presidential race that will pick up steam toward the Republican primaries that begin in February.
Democrat hopeful Hillary Clinton has already distanced herself from TPP, which is unpopular among the left of her party that views freed trade deals as favoring corporations while marching over labor and environmental rights. And while pro-business Republicans support TPP, many conservatives view multilateral trade deals as U.S. job killers.