PETALING JAYA: The much-awaited passage of the Trade Promotion Authority (TPA) bill to United States President Barack Obama is a step forward for the mega-regional Trans-Pacific Partnership (TPP) agreement.
Industry observers are all for the TPA, as it paves the way for Obama to fast-track any trade agreements without amendments from Congress members.
“With the TPA, negotiating countries for the TPP are more comfortable.
“Without the TPA, Congress would still be able to amend agreements that have already been signed.
“The TPA is an internal thing that the US needs to have,” said an observer.
Negotiations, the person added, were ongoing but no specific dates have been set yet for the next communication.
Previously, members and trade experts were less enthusiastic and even reluctant to conclude discussions without the “fast-track authority”, as it was not definitive if Congress would step in and make any amendments.
On Wednesday, following a 60:38 vote, the TPA bill was finally passed in the US after a six-week congressional tussle.
The TPA gives Obama and future presidents the authority to negotiate trade deals and send them to Congress for either a yes-or-no vote, without the possibility of amendments to the trade deals.
For this reason, the TPA is also known as a fast-track trade legislation or “fast-track,” an authority that will last six years.
The passage of the TPA is seen as a positive move, as it makes it easier to finalise negotiations on the TPP by the end of this year, as well as help pave the way for tough negotiations on the Transatlantic Trade and Investment Partnership.
The TPP, which has been a six-year ongoing negotiation, is a prospective trade agreement between the US and 11 other countries, namely, Malaysia, Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam.
The TPP covers a wide range of goods and services, such as financial services, telecommunications and even food safety standards.
Though already comprising 12 countries, covering some 40% of the global economy, China has reportedly also expressed interest in participating in the TPP at some point.
But the TPP is far from being concluded, as the US and Japan are still ironing out details on how much product tariffs will be reduced. Also, Canada has not yet put up an offer for areas such as the dairy sector.
Intellectual property and other issues like how long certain pharmaceuticals can be protected from competition against generic drugs also exist. The question of how the rules will govern state-owned enterprises and exclusions, if any, are also yet to be finalised. According to reports, the TPP boosts exports and economic growth and creates more jobs for the 12 countries involved. It is said to increases exports by US$305bil (RM1.16 trillion) per year by 2025.
It has been estimated that US exports would increase by US$123.5bil (RM469bil), with emphasis on machinery, especially electrical, automotive, plastics and agriculture industries.
The agreement will add US$223bil (RM847bil) a year to incomes of workers in all the countries, with US$77bil (RM292.6bil) of that going to US workers.
The TPA is, however, still open to public comment for 60 days before Obama signs it, and up to four months before Congress votes on it.
If the agreement fails to meet Congress’ objectives on labour, environmental and human rights standards, the “fast-track” agreement could be shut down by a 60-vote majority in the Senate, thus opening the deal to amendment.
The Obama administration’s goal is to get it back for Congress to approve it before the year is up.
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