THE TTALK QUOTES

On Global Trade & Investment

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The Global Business Dialogue, Inc.

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No. 35 of 2015

TUESDAY, MAY 26, 2015

Filed from Portland, Oregon

Click here for last Thursday's quote from Canada on COOL.

TRADE'S DOUBLE HELIX: TPA AND TPP

"Let's be real here. We need to get this bill passed. Just this morning I read that a ministerial meeting that was to begin this month has been canceled, in large part due to the fact that Congress has not approved this bill."

Sen. Orrin Hatch
May 21, 2015

CONTEXT

Senate Finance Committee Chairman Orrin Hatch (R-UT) had a good week last week. The challenge that he and other Senate supporters of the Trade Promotion Authority faced was to win Senate approval for a TPA bill that has been in the works for years. And they did. On Friday, May 22, the Senate approved the Trade Act of 2015 by the clear margin of 62 to 37. It was almost the same margin as the one by which they had to invoke cloture to limit debate on the bill the day before, May 21, ensuring that there would in fact be a vote on the trade bill. That vote invoking cloture was 62 to 38.

For those curious about the differences in the two votes, we noted two:

Senator Ben Cardin of Maryland, a Democrat, voted against invoking cloture on May 21, but when the trade bill came to vote on May 22, he was in the yes column.

Senator Mike Enzi of Colorado, a Republican, voted for the cloture motion on Thursday, the 21st, but did not vote one way or the other on final passage of the trade bill.

We shall return to some of these technicalities in the Comment section. Here we need to note that Senator Hatch was hardly alone in linking the Congressional action on TPA with progress in the TPP negotiations, the long awaited final deal. A report yesterday in New Zealand's Scoop Independent News made the same point. It did so with these quotes from Dr. Patricia Ranald of the Australian Fair Trade and Investment network. She said:

"Both Japan and Chile have said they will not finalize the Trans-Pacific Partnership deal until Fast Track Legislation has passed both houses of the U.S. Congress." And then,

"This means the TPP Trade Ministers meeting due on May 26 [in the Philippines] will not be able to seal the deal, and has been cancelled."

COMMENT

We think TPP will get done at some point, and hopefully sooner rather than later. We are not sure we are going to like everything in it when the final agreement is public, but we are convinced of its importance on two counts. First, without TPP (or something very much like it) U.S. producers will increasingly find themselves at a serious disadvantage in the competition for global markets.

And second, TPP can't just fade away. It will either succeed or fail. A Japanese official made that point rather starkly in comments recently to a Reuters reporter. "The strategic value is what we see in TPP," he said, adding:

"If AIIB [the Chinese led Asian Infrastructure Investment Bank] goes ahead and TPP fails ... perception-wise it will hurt in the leadership contest for the Asia-Pacific. It will be a missed opportunity and the countries that went along with the United States will pay the bill."

With those concerns in mind, we congratulate Senator Hatch and all of those who worked to get the TPA bill through the Senate last week. It doesn't stop there. Everyone in the Senate who honestly worked this month to illuminate issues and concerns surrounding this legislation - whether pro or con - performed a public service and deserves the appreciation of those who care about trade.

To say the least, the debate in the Senate generated a wealth of material in the relevant pages of the Congressional Record. We are still working our way through them and will, we expect, be highlighting more issues and passages in the days ahead.

For the uninitiated the situation can be a little confusing. Under the U.S. Constitution, revenue bills, including trade bills, have to originate in the House. And so the Senators chose a House bill, H.R. 1314 as their vehicle for TPA. As it had come over to them from the House, H.R.1314 was a bill to ensure that tax exempt organizations would have the right to appeal certain IRS determinations. The H.R. 1314 that passed the Senate on Friday, however, was the Trade Act of 2015. It has two titles. Title I provides for Trade Promotion Authority and Title II for the Extension of Trade Adjustment Assistance.

And those are the issues that the House of Representatives will take up next week, when the Memorial Day Recess will be over and trade will again be the issue of the day in Washington. (As doubtless it is in many districts this week.)

SOURCES & LINKS

From the 21st of May is a link to the page of the Congressional Record for that date with today's quote from Senator Hatch.

Cloture Vote on May 21 takes you to the pages of the Record with the Senate vote on May 21 to limit debate on H.R. 1314.

The Trade Act of 2015 is a link to the text of this legislation. NB: Be sure to scroll down to the text of the bill.

Final Passage is the page of the Congressional Record of May 22 with the recorded vote on the Trade Act of 2015.

Chained Together is a link to the Scoop article with the quotes from Patricia Ranald linking Congressional action on TPP with negotiating progress on TPP.

From A Japanese official is a link to the Reuters story with the quotes from Japan on the consequences of a failure of TPP, as it appeared in The Economic Times.

A Note on Grammar. We have no idea whether the Japanese official quoted above is a man or a woman, but we grew up in an age when, grammatically, the masculine included the feminine, and that is the rule we follow in these kinds of situations. We did not know, however, that the Brits had actually put that thought into law, though that is what the link will tell you.

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