It is a battle that ended in the President’s favour but it has still left a house divided. The Senate voted Wednesday 60-38 to pass legislation on trade promotion authority otherwise known as fast tracking which will give the President the ability to conclude negotiations around the controversial free trade agreement known as the Trans Pacific Partnership or TPP. If finalised the agreement would bind 12 Pacific Rim nations into a trade block that accounts for 40% of the global economy.
The President has faced stiff resistance within his own party with many suggesting that the agreement will only further devastate industries already under pressure such as manufacturing and industrial. The controversial agreement has also pitted unions against the President that could haunt Hillary Clinton’s tilt at the White House next year. Clinton will be hoping that the issue will be dealt with by the end of the year and well ahead of the 2016 campaign.
Susan Schwab, a former US Trade Representative in the George W. Bush administration said “I do not believe the vote on TPP will be easy,” and that Congress would “..the next battle.”
Meanwhile a key Democrats figure who helped sway some of his colleagues said “The reality is, in 2015, globalization is a fact of life,” said Sen. Ron Wyden (D-Ore.).
The TPP, which includes countries such as Canada, New Zealand and Australia is being seen as a pivot to China to try and stem the countries growing economic power although the US may not be impressed that Australia has decided to invest hundreds of millions of dollars into an infrastructure investment bank that has been developed by the Asian giant. Australia’s Treasurer Joe Hockey leaves for China to sign on as a founding partner. Some in the Administration that EntreHub has spoken with have indicated that some are seeing Australia as attempting to play a “…game of two halves” and that “it is unusual to sign the dotted line ahead of the TPP being finalised…”
“The rest of the world is still waiting for the U.S. to show global leadership on trade, and it won't be able to lead globally unless it succeeds regionally” with the Pacific Rim deal, said James Bacchus, a former Democratic House member from Florida and onetime chairman of the World Trade Organization's appellate body.
While Jared Bernstein, former Chief Economist for Vice President Biden said “No one believes you can turn back the clock, but what the different stakeholders are doing is trying to shape the rules of the road in a way that would benefit them,”
Whatever happens next the vote in the Senate may have given the President the green light for a next step but the real battle will loom in the Congress and within his own party if the TPP is to become a reality. It also suggest that the other 11 countries involved in the negotiations aren’t necessarily that important when it comes to whether their respective legislatures will pass the TPP into law given that if the US doesn’t bring the deal home then it won’t be worth the paper its been written on.
About the author: Matthew Tukaki is the editor of EntreHub.org. He is also the Chair of Deakin University CSaRO and sits on a number of public and private sector boards. You can follow him on Twitter @tukakimatt
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