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Political clock ticking on TPP

Political clock ticking on TPP
Canadian elections in October and the U.S. entering an election year in 2016 brings a small window to try to get a final TPP trade deal.

Hopes ran high that an agreement would be reached on the Trans-Pacific Partnership (TPP) during a ministerial meeting in Hawaii at the end of July, but negotiators for the 12 TPP countries adjourned with major issues outstanding and the way forward uncertain.

A joint statement from the involved trade ministers stated optimism, claiming that significant progress had been made and pledging that work would continue. Among the unresolved matters, however, are tough issues such as market access for automobiles and dairy products, as well as the data exclusivity period for biologic drugs, a key intellectual property question.

Twelve countries are included in the ongoing Trans-Pacific Partnership negotiations.

“In this last stage of negotiations, we are more confident than ever that TPP is within reach and will support jobs and economic growth,” the ministers said in a joint statement.

Statements from the top members of the Senate Finance Committee both welcomed the progress as well as not rushing to make a deal that wouldn’t meet the standards needed to get it across the finish line.

Dave Salmonsen, American Farm Bureau Federation senior director of congressional relations, noted the dairy issues focuses on market access wishes from New Zealand and the United States for Canada and Japan. “Everybody has to work together and do things in concert to make this work,” he explained. “Canada wasn’t quite ready to make enough of an offer that would satisfy New Zealand and the U.S. for increased market access.”

During the meeting, it was reported that Canada’s stance on dairy imports remained a major hurdle in the final round of negotiations. The Washington Post reported that Canada offered to reduce its dairy tariffs, which run up to 296%, but not enough to satisfy nations such as New Zealand.

Floyd Gaibler, U.S. Grains Council director of trade policy and biotechnology, said the failure to achieve an agreement is a concern because the “political clock is ticking.” He added, the Canadian election campaign is already underway, and the United States will be in full campaign mode by the beginning of next year.

Canadian leader Stephen Harper faces a tough re-election in October and the Wall Street Journal reported he’s trying to limit his conservative party’s losses in the populous dairy-producing provinces of Quebec and Ontario. “A Harper loss would complicate TPP ratification in Canada’s Parliament, but holding fast to dairy protectionism could scuttle the deal earlier,” WSJ said.

“Given the mandatory time periods for public and Congressional review, it will now be very difficult for Congress to vote this year on a TPP deal even if the remaining issues are settled quickly. Meanwhile, the politics of ratification get more polarized and more gridlocked every day as the elections draw nearer,” Gaibler added.

Salmonsen said President Obama has to give Congress at least a 90-day notification period before his intention of entering into a final TPP agreement. The President would need to notify Congress by early September to get a bill potentially considered before the end of this year, which looks less likely every day.  

Congress already has a busy fall planned and things get even more difficult going into a U.S. election year. Salmonsen said the final agreement also has to be one that could get approval. “With these tough issues, there’s still plenty to do,” Salmonsen said.

No date has yet been set for a resumption of TPP talks though the pending agreement is likely to be top of mind at another ministerial meeting planned later this month in connection with the Aug. 22-25 meeting of the Association of Southeast Asian Nations (ASEAN) in Kuala Lumpur where some of the TPP countries will be represented including the U.S.

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