[authors: Bonnie Byers and Joseph A. Laroski Jr.]
The working text (all 5,500+ pages) of the 12-country Trans-Pacific Partnership Agreement (TPP) was released to the public on November 5. This text is still undergoing an intense legal scrub and must be translated into its other official languages prior to signature. With the text now public, the Administration has an opportunity to demonstrate to a skeptical Congress and to the American public how the TPP has achieved its ambition of a “21st Century Agreement” that promises benefits for American farmers, businesses, and workers. Once implemented, the agreement among Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam will create an integrated regional economy accounting for 40 percent of global GDP.
On the same day, President Obama formally notified Congress of his intent to sign the TPP, an action required by the fast-track procedures. Under fast track, this notification triggers a 90-day Congressional review period during which Congress reviews the text, after which the President may formally sign the Agreement.
Congressional scrutiny is expected to be intense, particularly with respect to the last-minute concessions the United States made on some of the most controversial subjects in the Agreement. These issues include the level of data exclusivity commitments for biologics, an exclusion of tobacco regulations from the investor-state dispute settlement mechanism, auto rules of origin, access to the Japanese automotive market, investment, commitments on cross-border data flows, labor and environmental commitments, disciplines on state-owned enterprises, agricultural market access, and the lack of enforceable provisions to combat currency manipulation.
Trade agreements are not self-executing under U.S. law. Rather, such agreements must be implemented through legislation. Within 60 days of signing TPP, the President must submit to Congress a description of any required changes to existing laws. At least 30 days before formally submitting the TPP legislation to Congress, the President must provide Congress a copy of the final legal text and a draft statement of administrative action (SAA) proposed to implement the agreement. Within 60 legislative days of the introduction of implementing legislation, the House of Representatives holds an up-or-down vote (no amendments are permitted under fast track). Within 90 legislative days of introduction of implementing legislation, the Senate holds its vote (up-or-down).
Timing of the vote on final passage is uncertain. The earliest date that the President can sign the agreement is February 3, 2016, and there is reportedly a consensus building around a proposal to sign the agreement on February 4 in New Zealand. The International Trade Commission (ITC) then has 105 days to complete its analysis of the impact of the TPP agreement on the U.S. economy. The ITC has initiated this investigation expects transmit its report to the President and Congress on May 18, 2015. Even if the President were to submit formal implementing legislation and draft SAA language as soon as the ITC analysis is completed, passage before the end of the year is unlikely given the much abbreviated election-year calendar in the House and Senate. Based on current schedules, the House only has 59 legislative days and the Senate 77 legislative days, before the end of the year.
At the end of the day, timing will depend on whether and when there are sufficient votes to pass TPP. Much will turn on whether the President is able to convince a sufficient number of Congressional Democrats to support his trade bill to overcome those Republicans that will oppose passage in order to deny Obama a victory on his signature trade initiative. Election year politics have already come into play, and the presumptive Democratic presidential nominee, Hillary Clinton, has recently signaled her doubts about the trade deal, despite the fact that she was a huge booster of the agreement when she was Secretary of State. Mrs. Clinton’s position may be driven more by the opposition of her Democratic rival, Bernie Sanders, and by opposition from trade unions, than any firmly held convictions. She could well change course after the election, a time-honored tradition in several recent presidencies.
Sen. Orrin Hatch, who as Chairman of the Senate Finance Committee will be key to passage of TPP, has also expressed his concern about the substance of the deal, in particular the exclusivity period for IP protection of biologic drugs. He has stated that a Republican president could achieve a better deal on biologics and that he will push the current administration to renegotiate these provisions. Meanwhile, the White House has advised that renegotiating any aspects of the TPP will almost certainly kill the agreement. It is not unprecedented for particular provisions to be revised after conclusion of an agreement. Doing so is far from easy, however, and could unravel the delicate balance of concessions achieved in negotiations.
