Trans-Pacific Partnership (TPP): The Road Ahead
With international negotiators recently concluding TPP discussions, Congress is expected take up TPP ratification sometime in 2016 in the midst of campaign season. In what promises to be a contentious debate mirroring that surrounding passage of Trade Promotion Authority (TPA) legislation, Congress will address many controversial issues underlying TPP including market access provisions, labor and environmental standards, IP protections, and enforceable currency manipulation regulations.
The latter of these is likely to remain at the forefront of the debate in light of regulatory moves in China, Korea and Vietnam that have resulted in a devaluation of their respective currencies. Just recently, 158 House members, led by Representatives Debbie Dingell (D-MI) and Morgan Griffith (R-VA) issued a letter renewing calls for U.S. negotiators to ensure that the TPP contains strong and enforceable currency rules.
Complicating the picture is outstanding Customs and Border Protection legislation that also addresses the issue of currency manipulation. The Senate version contains a more stringent provision pushed by Chuck Schumer (D-N.Y.) that would direct the Commerce Department to treat undervalued currencies as an illegal subsidy under U.S. trade remedy law. If included in the final package, it could potentially open the floodgate of new countervailing duty cases against China. Also worth considering is that Congress has yet to reauthorize the Export-Import Bank which continues to draw strong reactions from both sides of the aisle.
Unless lawmakers can successfully push reauthorization through a successful transportation deal, the fate of the bank’s charter will continue to complicate the TPP dialogue. Overall, it will be important to monitor all of the issues outlined above given that TPA passed the House with 28 Democratic votes. Those votes appear necessary for TPP passage given that there is enough discontent among House Republicans to preclude passage of TPP on a party line vote. Also worth considering are pending changes in House Leadership with a new Speaker and Majority Leader, among other positions, coming in before the end of 2016.
Note again that Congressional consideration of the agreement cannot begin until after the 90th day the President notifies Congress of his intent to sign. This also includes a 60 day public review period of the agreement text. After the president signs the treaty, the timeline is much more fluid. For example, after signing but before the introduction of an implementation bill, the White House and USTR could quickly handle all administrative responsibilities associated with the introduction of the treaty in Congress such as submission of the USITC report which is due up until 105 after the treaty is signed. Once an implementing bill is introduced, the House and Senate can act concurrently to expedite approval.