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Unions, lawmakers promise closer scrutiny of Pacific trade pact

Reuters  |  WASHINGTON/SYDNEY 

By Krista Hughes and Matt Siegel

WASHINGTON/SYDNEY (Reuters) - U.S. unions, lawmakers and interest groups questioned the long-awaited text of a landmark U.S.-backed Pacific trade deal on Thursday, setting up a potentially long and difficult path to ratification by the United States, the biggest of the 12 partners.

Arguments over the Trans-Pacific Partnership agreement, aimed at cutting taxes and tariffs on commerce in 40 percent of the world's economy, are set to focus on transparency and how the pact affects workers and businesses.

"It's worse than we thought," Lori Wallach, director of Public Citizen's Global Trade Watch, told reporters on a conference call after examining the full text of the pact, which was unveiled early on Thursday.

U.S. labour representatives, who had already voiced opposition to the deal, said the agreement contained weak, poorly worded or unenforceable provisions.

"There are improvements, but we do not believe those improvements are significant or meaningful for workers," Celeste Drake, trade and globalisation policy specialist at the AFL-CIO, said on the same call.

U.S. President Barack Obama, who championed the deal, will have to muster support among moderates in Washington to ensure ratification.

"The TPP means that America will write the rules of the road in the 21st century," Obama said in a post online. "If we don't pass this agreement - if America doesn't write those rules - then countries like China will."

If ratified, the TPP will be a legacy-defining achievement for Obama and his administration's pivot to Asia, aimed at countering China's rising economic and political influence.

China has responded with its own proposed 16-nation free-trade area, including India, that would be the world's biggest such bloc, encompassing 3.4 billion people.

The TPP agreement would set common standards on issues ranging from workers' rights to intellectual property protection. Details have been under wraps during the more than five years of negotiations, angering those concerned over its broad implications.

DC REACTION MUTED

In Washington, where Republicans and some Democrats, including presidential candidate Hillary Clinton, have opposed the deal, reaction was muted. That perhaps was because the full text of the pact contains 30 chapters plus add-on agreements, running into thousands of pages.

The White House is likely to formally notify U.S. lawmakers on Thursday that the president intends to sign the deal, a senior Obama administration official said. That would start the 90-day clock before his signature triggers the next step in a process of seeking final congressional approval.

"It is vital that we use this 90-day review period - established for the very purpose of evaluating the agreement before the President signs it - to dig into the details and engage in a vigorous back-and-forth," said Representative Sander Levin, ranking Democrat on the House Ways and Means Committee, whose support will be vital for ratification.

The earliest the TPP could come before Congress is March, just as the U.S. presidential primary season is heating up, creating the risk that the deal becomes a campaign issue.

On the other side of the aisle, Paul Ryan, the new Republican Speaker of the House of Representatives, reserved judgement.

"I don't know the answer to what my position is on a trade agreement I have not even yet read," he told reporters on Thursday. "But again, I am pleased with the process we have coming before us."

Congress should not wait a year before acting, a White House spokesman said.

The U.S. Chamber of Commerce, whose support will also be crucial for passage through Congress, said it looked forward to examining the details. U.S. Trade Representative Michael Froman warned that trying to reopen the complex deal could unravel the whole package.

There was little immediate reaction from Asia.

Canada's new Liberal government said it would review the deal, negotiated by the outgoing Conservatives and opposed by some of the country's dairy farmers and auto workers.

"We are committed to reviewing the agreement ... and, crucially, to giving Canadians a chance to read it and to respond to it," said Trade Minister Chrystia Freeland.

FINE PRINT

Japan has pledged to ease trade barriers on imported french fries and butter, which have been in short supply in the Asian market, while Malaysia will eliminate tariffs on all imported alcohol for the first time in a trade agreement.

Other firsts cited by the partners - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam - include a prohibition on subsidies to harmful fisheries as well as commitments to discourage imports of goods produced by forced labour and to adopt laws on acceptable working conditions.

Malaysia will have to implement reforms to combat human trafficking, and Vietnam will have to allow independent labour unions before they can reap benefits of the pact.

But the deal does not include measures demanded by some U.S. lawmakers to punish currency manipulation with trade sanctions, disappointing carmaker Ford Motor Co , although members pledged not to deliberately weaken their currencies.

The TPP would be a boon for factory and export economies such as those of Malaysia and Vietnam. Anticipated tariff perks are already luring record foreign investment into Vietnamese manufacturing, and both countries are expected to see increased demand for key exports including palm oil, rubber, electronics, seafood and textiles.

That could put pressure on several of Asia's major developing economies, including the Philippines and Indonesia, which have recently expressed interest in signing up to the pact. Thailand said it was studying the deal and might consider joining.

(Additional reporting by Linda Sieg in Tokyo, Martin Petty in Vietnam, David Ljunggren in Ottawa and Roberta Rampton and Megan Cassella in Washington; Writing by Bill Rigby; Editing by Lisa Von Ahn and James Dalgleish)

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First Published: Fri, November 06 2015. 02:03 IST
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