Heralding the outcome of five-and-a-half years of negotiating the trade pact, the Administration exclaimed: “The TPP is a trade agreement with 11 other countries in the Asia-Pacific, including Canada and Mexico, that will eliminate over 18,000 taxes various countries put on Made-in-America products.”
But now that the text has been agreed upon by the 12 parties, what needs to happen before U.S. exporters can enjoy the fruits of these laborious negotiations?
By November 5, Congress had already had a 30-day exclusive look at the text. Nonetheless, the Administration pledged a full 90 days for public and Congressional scrutiny of the TPP, 30 days more than is required under the recently passed “Bipartisan Congressional Trade Priorities and Accountability Act of 2015,” which granted the President Trade Promotion Authority (TPA).
This period will be followed by an analysis of the economic and commercial impact of the agreement on the U.S. by the International Trade Commission (an independent U.S. agency designed to protect U.S. commercial interests in international trade agreements). The ITC can take as long as 105 days to complete its evaluation.
At that point, probably sometime in June, the Administration will submit implementing legislation to the Congress, where the House (first because the legislation involves revenue) and the Senate will each have 45 legislative days to report the bill out of their respective committees (House Ways and Means and Senate Finance) or to have it reported automatically.
Each house then has 15 days to bring the bill to a floor vote. House and Senate floor debate is limited to 20 hours, the legislation cannot be amended (either in committee or on the floor) and the bill is not subject to standard Senate cloture rules (no filibusters). If passed by a simple majority of both houses, the legislation goes to the President’s desk.
During the same period, the other 11 negotiating parties will ratify their agreements, usually through a much less tortuous parliamentary process.
If you have been keeping track, you will note that it will be virtually impossible for Congress to complete the ratification process prior to the November elections, given that members will be in recess during August and October.
The Administration almost certainly intended this to be the case when it released the TPP text. The timing was designed to spare Democratic senators from having to vote on the trade agreement, which is unpopular among many of their constituencies, before the elections. With only 10 seats to defend versus 25 for the Republicans, Democrats do not want to alienate their base when they have a real chance to recapture the Senate, while the President does not want to lose the vote on a key element of his legacy.
Although there is much to dislike in TPP, there are internal processes for reviewing and improving the agreement once ratified. The June bipartisan passage of TPA and Trade Adjustment Assistance (TAA), as well as the surprise resurrection of Eximbank in the Omnibus appropriations and tax bill, do suggest a trade majority still exists despite continued opposition from the Unions and Democratic presidential candidates, as well as many conservatives’ dislike of the President.
Consequently, business can probably expect to receive a ratified TPP agreement just in time for Christmas – 2016.