Trade ministers from the 12 countries participating in the Trans-Pacific Partnership (TPP) trade negotiations concluded talks on October 5, 2015. Negotiations are done but there is much left to do before this mega-regional trade accord is ratified and implemented
[Reposted from the Peterson Institute site | Jeffrey Schott | October 6, 2015]
If Congress and the president work closely, a TPP vote could be taken by Congress by mid-2016. However, differences over the drafting of implementing legislation could delay a vote for an extensive period (as occurred with the Korea-US Free Trade Agreement).
The following is the estimated timeline for this process in the United States, pursuant to the requirements of the recently enacted Trade Promotion Authority (TPA) legislation.
First, President Obama has to notify Congress of his intention to sign the accord after which at least 90 days must pass before he can actually put pen to paper. This open period allows Congress and the public to analyze and debate the actual terms of the agreement before the United States formally commits to its obligations. This notification sets in motion two complementary analyses of the TPP:
- All of the congressionally mandated private sector trade advisory committees will be provided the final TPP text and required to submit their assessment of the pact in their specific areas to the president, Congress, and US Trade Representative (USTR) within 30 days.
- The United States International Trade Commission (USITC) will be required to undertake, within 105 days, an economic analysis of the “likely impact of the agreement on the United States economy as a whole and on specific industry sectors, including the impact the agreement will have on the gross domestic product, exports and imports, aggregate employment and employment opportunities, the production, employment, and competitive position of industries likely to be significantly affected by the agreement, and the interests of United States consumers.”1
Because those reports require the full TPP text and national schedules for trade liberalization, it could take a short period before President Obama issues his formal notification. We expect him to do so during the week of October 12, 2015.
TPA also requires the president to publish the full TPP text on the USTR website at least 60 days prior to signing the pact. Legal teams from the 12 TPP countries have been reviewing those sections of the TPP deal that essentially had closed by the Maui ministerial meeting in July 2015 and hope to complete reviewing of the most recent decisions in the coming month. We expect the TPP text to be available to the public by the end of October or early November 2015.
After the notification, publication, and various consultation requirements have been met, the president can sign the TPP, which we expect as early as the second half of January 2016, but it could occur at a later date.
Assuming the TPP is signed in January, the next step is the drafting of implementing legislation. Unlike many other countries where the pact becomes part of national law once ratified, the US Congress needs to pass legislation to revise current US laws and policies in areas where US practice is not consistent with the new TPP obligations. While the president is required to submit the draft legislation to Congress, in practice the bill is crafted in Congress with input from the executive branch. There is no time limit for the completion of the draft implementing bill. The “fast track clock” mandated by TPA does not begin until the president takes the resulting draft bill and formally presents it to the House Ways and Means Committee. At that point, the TPA’s expedited procedures (e.g., no amendment, limited debate) take effect.
With close cooperation between congressional leaders and the executive branch, the draft TPP implementing bill could be prepared in the first few months of 2016 and then debated and voted on before the summer of 2016. If frictions arise between the two, then the consolidation of the draft bill could be delayed for months or longer (as occurred with the bill implementing the Korea-US FTA).
When could the TPP enter into force? The criteria for entry into force are detailed in the final provisions of the TPP accord and are not yet publicly available. Suffice it to say, the TPP will not be implemented until after Congress has approved it and other countries have followed suit. Under the optimistic scenario posited above, TPP implementation could start in 2017. But the start date could be pushed back if the drafting of the US implementing legislation is fractious and prolonged.
Note
1. See the “Bipartisan Congressional Trade Priorities and Accountability Act of 2015,” as codified in Public Law 114-26.
