On June 29, 2015, President Obama signed legislation that gives
him trade promotion authority ("TPA") for the first time
since 2007. Also known as fast-track negotiating authority, TPA
provides President Obama with the authority to negotiate
international agreements that Congress must either approve or
disprove, but cannot amend or filibuster. Such authority, which
will be in force until 2018 and can be extended until 2021, makes
it more likely that negotiations of the Trans-Pacific Partnership
("TPP") and the Transatlantic Trade and Investment
Partnership ("T-TIP") will result in new trade
agreements.
The United States is negotiating the TPP with 11 other
countries—Australia, Brunei Darussalam, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
According to the U.S. Trade Representative ("USTR"), as a
group, the TPP countries are the largest goods and services export
market of the United States. The statistics are telling: (i) U.S.
goods exports to TPP countries totaled $698 billion in 2013,
representing 44 percent of total U.S. goods exports; (ii) U.S.
exports of agricultural products to TPP countries totaled $58.8
billion in 2013, representing 85 percent of total U.S. agricultural
exports; and (iii) U.S. private services exports totaled $172
billion in 2012, representing 27 percent of total U.S. private
services exports. Many issues, such as those related to
agriculture, intellectual property, and services and investments,
remain unresolved among the 12 negotiating countries. TPA will
provide President Obama with the authority to negotiate and resolve
these issues, which is one of the primary goals of President
Obama's trade agenda. A ministerial meeting aimed at finalizing
the TPP is scheduled for the last week of July.
T-TIP is a proposed free trade agreement currently being
negotiated between the European Union and the United States.
According to USTR, the goal of T-TIP is to bolster the already
strong relationship between these two strategic partners. Together,
the parties represent almost half of global gross domestic product,
nearly 30 percent of global trade in goods, and approximately 40
percent of global trade in services. The most recent round of T-TIP
negotiations took place in New York in April 2015. The next round,
which will be the 10th round of negotiations, is scheduled to occur
July 13–17 in Brussels. Similar to TPP, TPA will provide
President Obama with the authority to negotiate and resolve
outstanding issues between the European Union and the United States
under the T-TIP.
We will continue to monitor developments under the TPP and T-TIP
in the wake of TPA. In the meantime, companies that trade
internationally should be thinking about and preparing for how
these free trade agreements may affect their business and, to the
extent possible, how to benefit from opportunities they may create.
We are available to assist in connection with any such efforts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
