This week the US Senate is set to decide on a bill that will give President Obama the fast track authority to finalize the 11-nation Trans Pacific Partnership (TPP) free trade deal; however the deal faces not only opposition abroad, but also needs to clear hurdles between the US and Japan, the two largest economies covered by the agreement.
As we reported earlier, President Obama faces opposition from his own Democratic Party, especially from more progressive-leaning politicians such as Senator Elizabeth Warren of Massachusetts. Senator Warren especially points out the investor-state dispute settlement (ISDS) mechanism anticipated in the deal, which she says would “let foreign companies challenge American law outside of American courts.” ISDS is a dispute settlement process for disputes between companies and foreign governments.
Democratic presidential hopefuls are also trying to handle this question. Former Secretary of State Hillary Clinton tried to stay away from the controversy, with The Huffington Post reporting that Clinton’s campaign chairman John Podesta reported joked if someone can make the TPP issue “go away.” The more left-wing Vermont senator Bernie Sanders said yesterday that he strongly opposes the TPP in that “it follows in the footsteps of other disastrous trade agreements that have cost us millions of jobs.”
Aside from the domestic opposition in the US, Japan also faces opposition from agricultural sectors and automakers. Rice and automobile markets have been traditionally protected from foreign competition in Japan. In marathon negotiation sessions last month, Japanese and US trade representatives were not able to make any lasting progress. During a trip last week by Japanese Prime Minister Shinzo Abe, the two sides could not announce the conclusion of the deal as originally hoped.
The TPP is also widely seen as a tool for the US to increase its weight in Asia, as well as a curb on China’s expanding its influence. According to a speech given by President Obama last week, the TPP will write the rules of international trade before China does. The Economist magazine opined that for both US and Japan to expect the trade pact to play a geopolitical role is actually detrimental to concluding the deal.
Currently Taiwan is not part of the TPP negotiations, but Taiwan has long expressed interest in joining. DPP presidential candidate Tsai Ing-wen is expected to discuss the TPP during her visit to the United States at the end of this month.
(Feature photo of US President Obama, left, and Japan Prime Minister Shinzo Abe, by the White House.)