TPP Won't Be Taken Up in 2016, McConnell, Brady Say

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By Len Bracken and Rossella Brevetti

Nov. 9 — Congress won't take up the trans-Pacific trade pact in 2016 but is open to “better deals,” Senate Majority Leader Mitch McConnell (R-Ky.) said Nov. 9.

“Well it's certainly not going to be brought up this year,” he said at a news conference in the Capitol, referring to the 12-nation Trans-Pacific Partnership (TPP).

House Ways and Means Chairman Kevin Brady (R-Texas)—in a statement e-mailed to Bloomberg BNA—echoed this view.

Brady said the Obama administration is working to address members’ concerns about the TPP, but “significant concerns” remain on both sides of the aisle. “As a result, this important agreement is not ready to be considered during the lame duck and will remain on hold until President Trump decides the path forward. We will work closely with the new Administration on this effort.”

The Ways and Means chairman, a key voice on trade policy, said the U.S. needs more customers for its economy to grow. “We cannot afford to simply buy American—we must also sell American. That’s why I’ll continue to be a strong supporter for the freedom to trade,” Brady said.

McConnell said President-elect Donald Trump has made it clear he opposes the “current agreement” while noting the law providing for streamlined congressional consideration of trade pacts, trade promotion authority (TPA), would remain in place.

“But he has the latitude because TPA is in place through the next administration to negotiate better deals, as I think he would put it, if he chooses to, and sending it up to us for an expedited up or down vote,” McConnell said.

Trade promotion authority allows the administration to negotiate trade deals that they can submit to Congress for straight up or down votes.

New Trade Policy?

Rep. Tim Murphy (R-Pa.) welcomed Trump's victory and said the country had a positive agenda to grow the economy, write better trade deals to protect U.S. steel and manufacturing industries and rebuild the nation’s aging infrastructure.

On the other side of the aisle, Rep. Peter DeFazio (D-Ore.) said Congress and the Trump administration will have to work on finding common ground. He said he looks forward to working with the new administration on a new trade policy. DeFazio said he voted against each “so-called ‘free' trade agreement, which has exported quality American jobs to seek out the cheapest, most exploitable labor around the world.”

No Repackaging of TPP

Lori Wallach, director of Public Citizen's Global Trade Watch, told Bloomberg BNA that she did not see a way that the TPP could be repackaged to make it palatable to Trump even if strong provisions on currency manipulation were added.

“The Washington policy elite supporting TPP who are thinking about TPP as a policy they can repackage to appeal to Trump have fundamentally missed the lessons of this election,” Wallach said. “I don't really see a path forward to tweaking the contents of the TPP in a way to entice Trump to suddenly become a backer.” She cited his long-standing opposition to trade deals modeled on the North American Free Trade Agreement.

Even if House Speaker Paul Ryan (R-Wis.) decided to bring up the TPP in the lame-duck session, Wallach said it's hard to see where he would get the votes to assure passage. She said there are 16 GOP members who voted for trade promotion authority who have come out against the TPP, while the original 54 Republican members who voted against trade promotion authority have not flipped to supporting the TPP.

“If you do the math, they are many votes short of passage,” Wallach said. Vote shortages also got bigger because undecided Republicans have seen the political implications of “being on the wrong side of this issue” in the election, she said.

No Deals With Asia, China

In related news, Dan DiMicco, a trade adviser to Trump, warned against prospective trade deals with Asia and China.

DiMicco, the former chief executive officer of U.S. steel manufacturer of Nucor Corp., said in a tweet Nov. 8 that trade deals with Asia and China are not good for the U.S. unless they require an end to the accumulation of profitable balances through protectionism, known as “trade mercantilism,” and an end to currency manipulation.

DiMicco is an outspoken critic of the TPP, which includes a nonbinding side agreement against currency manipulation and is touted by the Obama administration as a counterweight to China’s trade policies in the region. China is not part of the TPP pact, but the current administration is also negotiating the U.S.-China bilateral investment treaty with Beijing.

Alan Price, partner and chairman of Wiley Rein LLP’s international trade practice in Washington, D.C., said in media statement that with the election of Trump, ratification of the TPP is now unlikely in the short term or medium term.

Alan Wolff, a member of the international trade practice with Dentons LLP, said “nothing that has the label TPP—or in the near term the content of TPP—will be put into place by the U.S.” He added in a statement that the Senate isn't likely to approve a bilateral investment treaty with China if the current administration rushes into one.

To contact the reporter on this story: Len Bracken and Rossella Brevetti in Washington at lbracken@bna.com and rbrevetti@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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