It was reported Monday that in a marathon 100-hour negotiating
session the 12-nation Trans-Pacific Partnership (TPP) reached
agreement on the TPP trade pact. The TPP was negotiated in secret,
i.e., only the diplomatic negotiators (the United States Trade
Representative for the U.S.) and special industry advisors have had
access to the text. Indeed, it was reported that the Agreement will
remain under wraps for four more years.
Nevertheless, there have been some news leaks from the parties.
Automotive (along with intellectual property) issues have been
particularly contentious. The U.S., joined by Mexico and Canada,
has been battling Japan on those issues. It is reported that the
U.S. auto industry won phase-outs, albeit long, of the Japanese
passenger car import (2.5%) and truck (25%) taxes.
Automotive content percentages were reported to have been another
difficult issue, i.e., to qualify for reduced tariff treatment, how
much of a vehicle's content must be made inside the 12-Member
TPP region. Japan wanted the standard to be lower than the 62.5%
required under NAFTA for assembled automobiles and 60% for parts.
But, apparently, negotiations were reopened after Mexico and Canada
pushed back. In addition, it is reported that Japanese non-tariff
barriers would be reduced (e.g., regulations and design
criteria).
Shortly after the deal was announced, Ford quickly announced its
opposition saying: "To ensure the future competitiveness of
American manufacturing, we recommend Congress not approve T.P.P. in
its current form." Reportedly, Ford was concerned the TPP did
little to stop currency manipulation by some TPP countries.
Approval from Congress is far from assured. The votes will not be
for several months. Moreover, the vote to extend the
President's fast-track trade agreement negotiating authority
barely passed the House last June (218-210). This doesn't
portend well for the TPP. Also, with the impending change of
GOP leadership in the House, there is some question whether any
controversial measure is capable of passage in the House this
session. The Senate must vote 30 days after the House. The Senate
is more likely to approve, because it voted 60-38 to approve
fast-track legislation. While close by filibuster standards, that
same legislation requires only a bare majority to approve the TPP.
On the other hand, both Majority Leader McConnell and Senate
Finance Chair Orin Hatch have voiced serious concerns about the
pact.
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