WASHINGTON — President Obama said Thursday the odds of closing a deal on the Trans-Pacific Partnership free trade accord are “significantly higher” than 50-50, and much better than they were last year.
Obama made the prognosis on the TPP deal to business executives, governors and other officials were attending the President’s Export Council.
“I am much more optimistic about us being able to close out an agreement with our TPP partners than I was last year,” Obama said. “It doesn’t mean it’s a done deal but I think the odds of us being able to get a strong agreement are significantly higher than 50-50; whereas last year I think it was still up for grabs.”
The U.S. is negotiating the TPP with Vietnam, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.
The president’s remarks came as the chief negotiators of the 12 countries were in Washington this week to try to narrow differences and resolve outstanding issues.
The fashion industry has a big stake in the TPP negotiations. Vietnam is the second largest apparel supplier to the U.S. and could gain significantly if a deal is finalized.
Among the unresolved issues are a rule of origin for textiles and tariff phaseouts on sensitive imports.
The U.S. has proposed a yarn-forward rule of origin that requires apparel be made of fabric and yarns supplied by the U.S. or other TPP partner countries to qualify for duty-free benefits when shipped back to the U.S. Importers oppose the rule, but American textile producers claim they need it to compete. Industry sources have also said one of the sticking points in the negotiations is a deep division between some of the countries over the textile rule origin.
Larger issues also loom over the TPP negotiations. The U.S. has been pressing Japan, for example, to lower tariffs on autos and agricultural exports and Obama has also faced opposition to the TPP from organized labor as well as some members in his own party, who have raised concerns about a number of issues, including labor and environmental standards and intellectual property protections.
“Assuming we are able get the kind of agreement that is good for American workers and good for American business, how we do we proceed in Congress?” Obama asked the export council. “I think that despite the fact that we had an election…that I wasn’t that happy with [Republicans took control of the Senate and widened their margins in the House] the dynamics really don’t change in terms of the number of votes in the House and Senate that are there to be gotten for a good trade deal but we have to make the case and I think we can make a very strong case,” he said as he urged business executives to argue the case for TPP on Capitol Hill.
On a separate issue, Obama said he may need help from business leaders in lobbying Congress to not get out ahead of the Europeans on sanctions against Russia, which has faced rounds of sanctions from the West over the annexation of Crimea and its incursion into Eastern Ukraine.
“Where [Russian President Vladimir] Putin will succeed is if it creates a rift in Transatlantic relations — if he starts to see Europe divide from the U.S.,” Obama said. “That will be a strategic victory that I intend to prevent.”
“The notion that we can simply ratchet up sanctions further and further and ultimately Putin will change his mind I think is a miscalculation, ”Obama said. “What will ultimately lead to Russia making a strategic decision [in Ukraine] is if they recognize Europe is standing with the U.S…and we in fact are being patient. If they see there aren’t any cracks in the coalition then over time [they] could see the cost to their economy outweighs whatever strategic benefit they are getting.”