TPP talks in limbo

June 15, 2015 – For the U.S. president, it was a day of humiliation. For international free-trade talks, a moment of hesitation.

A dozen countries including Canada are now probing the debris from a disastrous day in Barack Obama’s efforts to reach a major trade deal.

It’ll quickly become clear whether the Trans-Pacific Partnership agreement was temporarily diverted by the U.S. Congress on Friday or more permanently derailed.

Obama made an extremely rare visit to Capitol Hill to lobby members of his own party to support a provision that would be a precursor to a so-called fast track toward a deal.

He did something similar a few years ago with his signature health legislation in jeopardy. That time, he won. This time, Obama’s Democratic allies sent him back up the street to the White House, empty-handed.

The insta-reaction from some commentators was that this heralded the final, lame-duck phase of Obama’s presidency. Others saw proof of the Democratic party’s leftward drift.

A veteran of the original Canada-U.S. free-trade negotiations explained the stakes for the international community: Unless the president gets fast-track authority, a trade agreement becomes a long shot.

Gordon Ritchie was a senior Canadian negotiator of the original deal and recalled that talks only got serious after lawmakers gave Ronald Reagan that power.

“For a year and a half, with great hubbub and fanfare, we’d engaged in an elaborate ritual mating dance. But we never consummated,” Ritchie said in an interview earlier Friday.

The momentum gathered once Congress gave up its power to amend the accord, and agreed to simply vote Yes or No to the final deal – a process better known as fast track. That’s when the sides attacked the main sticking point: a mechanism to settle disputes between
governments and companies.

Key issues in the present-day talks include intellectual property, such as what power pharmaceutical companies might have to extend drug patents, and agriculture subsidies.

The Americans want Canada to loosen its tightly controlled dairy system. Ritchie agrees with them. He wished the dairy sector had been opened up a quarter-century ago, as wine was, because he says it not only encouraged innovation and increased sales, but also drove down prices and benefited shoppers.

But there’s little incentive for governments to take those kinds of political risks, he says, without any confidence the deal won’t just wind up stalling in U.S. Congress.

“No one in their right mind would negotiate with the administration, knowing that every imaginable U.S. special interest would then make the most outrageous demands through their
congressional mouthpieces in a sort of second negotiation.”

One example from the 1980s talks: Ritchie recalls the U.S. asking that the free-trade agreement allow a certain Maine outfitter to sell fishing trips in New Brunswick.

Canada said no, and that was the end of it. Without fast-track authority, though, a Maine lawmaker might have felt pressure to block the deal without a fishing-trip amendment.

Ironically, a fast-track bill actually did actually pass the House on Friday. But it was different from the version that passed the Senate – the two bills will die unless they’re reconciled.

What happened is Democrats disfigured the Senate version, by defeating a provision they support in theory: an assistance fund for workers displaced by globalization.

Democrat leader Nancy Pelosi explained her surprise vote: “We need to slow this ‘fast track’ down.”

Obama’s party offered differing interpretations of his visit. Some called it condescending; others said it helped, but the vote was already a fait accompli.

The White House later sounded an optimistic note. It pointed out that the trade package also appeared dead in the Senate last month, but was revived a few days later.

As he left Capitol Hill, Obama said, “I don’t think you ever nail anything down around here. It’s always moving.”