Trade officials from the U.S. and 11 Pacific Rim countries signed the sweeping Trans-Pacific Partnership trade deal Thursday morning in Auckland, New Zealand, setting the stage for what is expected to be a challenging road to ratification by the U.S. and the other nations.
The formal signing of the agreement, which was Wednesday evening in the U.S., marked an important step for the countries as they strive to build support in their respective legislatures to get the deal approved and implemented.
Trade ministers reached an agreement on TPP, which includes the U.S., Australia, Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Chile, Brunei and New Zealand, in October. It aims to remove barriers to trade and would encompass 40 percent of the world’s gross domestic product if enacted.
“After more than five years of negotiations, we are honored to be able to formalize our collective agreement of TPP, which represents an historic achievement for the Asia-Pacific region,” the ministers said in a joint statement. “The signing of the agreement signals an important milestone and the beginning of the next phase for TPP. Our focus now turns to the completion of our respective domestic processes.”
The next step in the U.S. is expected to occur in mid-May, when the U.S. International Trade Commission is expected to release a mandated report on the economic impact of TPP. The Obama administration can then submit implementing trade legislation to Congress for consideration and votes.
Congress is expected to begin considering TPP and possibly vote on the trade deal this year, but a difficult legislative fight is expected.
U.S. Trade Representative Michael Froman was asked at the top of a press conference after the signing whether the U.S. would be able get TPP through Congress and ratify the deal.
Froman responded: “We are working with our stakeholders, we’re working with members of Congress, we’re working with leadership in Congress, educating everybody as to what is in the agreement and addressing their questions and concerns. I’m confident at the end of the day because of the strong benefits to the U.S. economy, which have been estimated to be over $132 billion a year in GDP growth and more than $350 billion in additional exports, that members of Congress will see the benefits for their constituents and we will have the necessary bipartisan support to be approved.”
TPP has become a political football in the U.S., opposed by the Democratic presidential candidates, some of the Republican presidential candidates and many Democratic lawmakers. But many major business groups have backed the trade deal and Obama is banking on their help to convince lawmakers on Capitol Hill to bring it to a successful vote in his last year in office.
The top two Republican leaders — Senate Majority Leader Mitch McConnell (R., Ky.) and House Speaker Paul Ryan (R., Wis.) — who met with President Obama at the White House on Tuesday to discuss possible legislative action this year, both said after the meeting that they had concerns about TPP and would continue to work with the administration to resolve their issues.
McConnell reiterated that he wants to wait until after the November elections to consider TPP. Several other TPP partner countries will also have to overcome opposition to get approval.
Trade ministers from New Zealand and Australia said they planned to take the signed agreement to their respective parliaments early next week, where legislative consideration would begin. The trade minister for Malaysia said his parliament had already debated and approved it before it was formally signed, but would still need parliamentary approval on amendments to existing legislation. Similarly, ministers from the other countries said they will next turn to the domestic process of ratification.
The U.S. fashion industry has a big stake in the agreement. The U.S. imports $22 billion in apparel, textiles and footwear from the TPP countries and exports around $14.25 billion. Vietnam is the second-largest apparel supplier to the U.S. after China and a big sourcing hub for companies.
A coalition of five major industry trade and lobbying groups dubbed the TPP Apparel Coalition said Wednesday that TPP is “a ground-breaking trade agreement [that] will join together consumers in the United States and 11 other TPP partners.”
“Representing 40 percent of the world’s GDP, the TPP will help apparel brands and retailers reduce costs, enter new markets and support trade-based jobs,” the coalition said. “Timely ratification and seamless implementation is important so that our industry and the millions of American workers they employ can take advantage of the benefits of the TPP.”