THE TPPA POST-US ELECTIONS
8th and 9th
of November 2016 were days of reckoning and days of reflection where the United
States of America went to the country and voted for the Republican Candidate Donald
Trump as the new President, and returned both the Senate and the House of
Representatives to the Republicans. The election of Donald Trump and the more conservative
but pro-business Republicans to the pinnacle of the US Administration and
Congress raises one important question, i.e. what will happen to the United
States’ driven Transpacific Economic Partnership Agreement or widely known as
the TPPA.
Although I am generally a
pessimist, in this regard, relating to the fate and future of the TPPA, I take
a very optimistic and positive view, for the following reasons:
1.
President Obama still has until 19th
of January 2017 to push through the TPPA ratifications in the United States’
Congress, which is another 2 months. The current Congress still functions and
is still capable within its mandate to ratify the TPPA as an important legacy
for President Obama. With President Obama handing over power to Donald Trump
instead of Hilary Clinton, Obama and supporters of TPPA at the Congress
(representing both the Democrats and the Republications) will work harder to
push through the deal in Congress by the 19th of January 2017.
President Obama has put up notice to Congress on 12 August 2016 that TPPA is
going to be deliberated and debated and voted by the Congress, under the fast
track power granted by the Trade Priorities and Accountability Act of 2015
(TPA-2015), which was signed into law by President Obama on June 29, 2015,
which applies to trade agreements signed by 1st of July 2018. Under
the fast- track, Congress will be able to vote Yes or No but will not be
required to go through the agreements in detail. This power is not limited to
President Obama, but will also be extended to President Trump.
2.
It is hard to predict how the Congress will vote
before the current term ends on 19th of January 2017, where both
houses of Congress, the Senate and the House of Representatives are divided
over the TPPA deal. However, one cannot simply shoot down the TPPA as a dead
duck, as the Senators and the House Representatives may want to give the deal
as important approval before many of them leave the Congress for the last time.
Joe Biden said, there is a genuine chance that the TPPA will be passed by the
Congress before the end of the term (Reuters, 22 September 2016).
3.
TPPA is important, not just for the USA, but
also for the 11 other TPPA negotiating Parties, and for Asia and the Pacific
economy. The USA will be able to influence trade and investment rules and
rule-making in the many decades to come. The TPPA is not just part of the USA’s
trade policy, it forms part of the overall USA’s foreign policy. TPPA
negotiating Parties will push the USA to ratify the TPPA through various
official and unofficial channels and USA, as the World’s Number One economy
will have to listen. In addition international trade is important for the USA,
as it makes up 28 percent of the USA’s GDP of USD 17.947 trillion in 2015,
which is about USD 5 trillion or about RM 20 trillion, (almost 20 times of
Malaysia’s total international trade), compared to just 9 percent in 1960
(World Bank, 2016). This also shows that the USA has come a long way from being
a protectionist economy to a more open and international trade embracing
economy.
4.
The USA’s foreign and foreign trade policies are
not made by one person and for one person. The US Trade Representative for
example has to listen to the various working group and committees that provide
policy input and proposals. These working groups and committee represent a
broad range of trade and investment interests, not to forget the labour groups
such as the AFL-CIO. These working groups will ensure that the TPPA is ratified
and brought into action as they have been working hard to provide their input
to the USTR during the TPPA negotiations. These working group representing
industries and investors will ensure that their voices are heard in the
Congress.
5.
In the event that President Obama fails to get
the Congress to ratify the TPPA by 19th of January 2016, there is
still a high probability that President Trump will ratify the same, for the same
reasons that I have argued above. History may repeat itself. When NAFTA was
negotiated by President George H Bush, candidate Bill Clinton said he would
support the agreement subject to some changes. President Clinton signed and
approved NAFTA. At the same time note that George H Bush was a Republican
president in the same way as President Elect Donald Trump.
6.
In his election rhetoric, Donald Trump said he
would cancel the TPPA because it is a “rape” to the US economy as it is bad for
job and causes the decline in the manufacturing. However, being President is a
different kind of game. President Trump will have to ensure that the economy
continues to run and create jobs and opportunities at home and he has to rely
on the international trade for this. Without international trade, US will be
trading domestically and this will increase cost as wages are high and natural
resources are scarce in the US. At the same time, any policy that goes against the
WTO agreements will be subject to dispute settlement claims under the WTO
Dispute Settlement Mechanism. Being an international businessman, Trump cannot
afford to be seen and to implement anti-globalisation and anti-international
trade as these policies will go against USA’s global economic and political interest.
7.
In conclusion, there is still room for TPPA to
be approved and implemented.
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