President-elect Trump said he would withdraw from TPP on his first day in office. Japan’s PM Abe said the TPP would be meaningless without U.S. participation. House Ways & Means Chairman Kevin Brady, Trade Subcommittee Chairman Dave Reichert, and Senate Finance Committee Chairman Orrin Hatch say TPP is still possible. Asked how he plans to persuade Trump to reconsider his stance on the Asia-Pacific deal, Hatch said, “well, I’m fairly persuasive sometimes.”
President-elect Trump said in a YouTube video that “On day one, … I am going to issue a notification of intent to withdraw from the Trans-Pacific Partnership.”
Japan’s Prime Minister Abe said “The TPP would be meaningless without the United States,” since the U.S. accounts for 60.3% of the combined GDP of the TPP countries. Japan is a distant second at 17.7%.
TPP’s Chapter 30 provides that the TPP will enter into force on Jun 1, 2018, two years and 60 days after signing on Feb 4, 2016, if at least six TPP members accounting for 85% of the combined 2013 GDP of the 12 TPP members, have ratified the agreement.
Both the U.S. and Japan must ratify for the TPP to go into effect since together they account for 78% of TPP GDP. The remaining 7% and four TPP countries to meet the requirement would be from Canada (6.6%), Australia (5.6%), and Mexico (4.5%), while the other seven account for about 1% or less each: Malaysia (1.2%), Singapore (1.1%), Chile (1.0%), Peru (0.7%), New Zealand (0.7%), Vietnam (0.6%), and Brunei (0.1%).
“Do I think the TPP may go forward? Yes, I do,” said Reichert, Chairman of the House Ways & Means Trade Subcommittee. “It could be bilateral agreements, it could be multilateral agreements in pieces, it could be all in one piece. But I’m not going to give up on it.”
Reichert says the path forward is to focus on the specifics of the deal. “The substance of the agreement drives the process,” Reichert said. “So if we can get to a place where the substance is agreeable to the members, the issues that they have concerns over have been addressed, then the process moves forward.”
Ways & Means Committee Chairman Kevin Brady (R-TX) has met with President-elect Donald Trump’s transition team to talk about trade issues and intends to establish a “regular ongoing” dialogue, including making the case to Trump that a trade agreement in the Asia-Pacific is crucial to growing the U.S. economy.
The immediate future of the TPP may look dim, at least in the United States, but Brady said that aspects of it — if not the deal itself — can and should be preserved and revived later on down the road. Rather than simply withdrawing from the TPP, Brady said it should be fixed.
Senate Finance Committee Chairman Orrin Hatch said the Trans-Pacific Partnership can be ratified under President Trump even if it begins as a bilateral deal with Japan, emphasizing that his plan would be in accord with Trump’s pledge to pursue fair, bilateral trade deals instead of larger regional ones.
“I think if we could sign up with Japan we’d get a lot of other countries too,” he said. “I mean the real problem here has been Australia and they’ve acted reprehensibly in my eyes, although I’m sure they feel that from their standpoint they’re doing what’s right.”
Asked how he plans to persuade Trump to reconsider his stance on the Asia-Pacific deal, Hatch said, “well, I’m fairly persuasive sometimes.”
Perhaps this refers to the broad jurisdiction of the Finance Committee, as explained on the U.S. Senate website: “The Committee concerns itself with matters relating to: taxation and other revenue measures generally, and those relating to the insular possessions; bonded debt of the United States; customs, collection districts, and ports of entry and delivery; reciprocal trade agreements; tariff and import quotas, and related matters thereto; the transportation of dutiable goods; deposit of public moneys; general revenue sharing; health programs under the Social Security Act, including Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF) and other health and human services programs financed by a specific tax or trust fund; and national social security.” http://www.finance.senate.gov/about/jurisdiction
It is conceivable that a new US Administration could seek to “correct” the flaws of the TPP to make it sellable to a domestic constituency. It would have to do this in a manner that did not reopen the entire text of the treaty or negotiations between all parties. But it’s not beyond the wit of lawyer, trade negotiator and politician to figure out how to do this. The TPP itself is, in essence, a series of bilateral commitments under a plurilateral umbrella. Attached to it are a series of bilateral exchanges of letters between some of the members on specific commitments, perhaps a similar device could be used to “tweak” the TPP sufficiently to allow U.S. ratification.
Rep. Dave Reichert thinks TPP is not dead, Nov 29. 2016
Brady in ‘regular ongoing discussion’ with Trump transition team on trade, Dec 1, 2016 (subscription)
Ways & Means Committee Chairman Kevin Brady (R-TX) said he has met with President-elect Donald Trump’s transition team to talk about trade issues and intends to establish a “regular ongoing” dialogue, including making the case to Trump that a trade agreement in the Asia-Pacific is crucial to growing the U.S. economy.
Hatch confident Trump can be persuaded to change his mind on TPP, Inside World Trade, Dec 1, 2016 (subscription)
Senate Finance Committee Chairman Orrin Hatch (R-UT) this week doubled down on his claim that the Trans-Pacific Partnership can be ratified under President Trump even if it begins as a bilateral deal with Japan, maintaining that the president-elect will reconsider his stance once he realizes the consequences of withdrawal.
Orrin Hatch holds the cards on TPP trade deal, Politico, Oct 19, 2015