Ag Policy Blog

President Obama's Trade Agenda in Jeopardy

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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President Barack Obama's aggressive trade agenda appears to be collapsing in a wave of market and political uncertainty.

The administration has worked to get congressional approval for a 12-nation trade deal in the Pacific that would be considered the largest trade deal in U.S. The Trans-Pacific Partnership (TPP) would only be topped by an even bigger trade deal across the Atlantic with the European Union, the Trans-Atlantic Trade and Investment Partnership (TTIP).

Both trade deals at the moment appear to be in jeopardy for different reasons.

TPP

Even as the continued leader of the Democratic Party, who will be expected to speak and set up presumed nominee Hillary Clinton at the Democratic National Convention later this month, Obama's Trans-Pacific Partnership is being undercut by Sen. Bernie Sanders. As Washington Insider noted Wednesday, Sanders and former Democratic Chairman Howard Dean are both pushing for specific language in the party platform to oppose TPP.

"The Democratic Party must go on record in opposition to holding a vote on the TPP during the lame duck session of Congress and beyond," the Sanders campaign said in the petition on its website. Sanders was also tweeting that same message Tuesday. http://www.bloomberg.com/…

The party platform committee meets Friday and Saturday to draft the final platform the Democratic Party will carry into Philadelphia.

Agricultural groups have been among the most champions of TPP. A report on TPP released in May by the U.S. International Trade Commission projects TPP would help increase U.S. agricultural exports by $7.2 billion by 2032 with U.S. ag exports increasing in Japan, Vietnam, Malaysia, New Zealand and Brunei. Ag imports would increase by about $2.7 billion. Thus, at full implementation, agriculture should gain about $4.5 billion in net exports under the trade deal. https://www.usitc.gov/…

Currently hopes for TPP hinge on possible Senate action during the lame-duck session after the November election.

TTIP

On the Atlantic side, European ministers have been all over the map regarding TTIP since the British vote two weeks ago to exit the European Union. The EU governing bodies seem increasingly incapable of getting enough consensus on much of anything and thus have to turn over more decisions back to the 28 individual countries. TTIP will not only likely be delayed at past the Obama administration, but it is highly possible TTIP could become akin to the Doha Round of the WTO, another ambitious trade endeavor that could not get completed.

The EU Commission added the trade uncertainty Tuesday by deciding that all 28 national parliaments in the trading bloc would get to hold their own vote on whether to ratify the EU-Canadian free trade agreement. A far smaller deal than TTIP -- simply because the Canadian economy is much smaller than the U.S. economy -- the EU Commission decision is still considered a setback to the possibility of completing the EU-Canadian deal. EU Commission President Jean-Claude Juncker made the call to give every country an individual say on the Canadian FTA.

"I have looked at the legal arguments and I have listened to Heads of State or Government and to national Parliaments. Now it is time to deliver. The credibility of Europe's trade policy is at stake," Juncker said in a statement.

Juncker's decision on the Canadian deal means TTIP would likely have to also go to every single member-state parliament for approval as well -- assuming TTIP ever gets that far. Based on some recent comments from various European ministers, the U.S.-EU deal seems less and less likely. Italy's industry minister was quoted by Reuters on Tuesday saying he thought TTIP "will fall through" because it has taken too long and confidence is lacking. http://www.reuters.com/…

Around the same time, France's junior minister for trade and commerce as quoted saying TTIP would be impossible to get done in 2016. That statement more or less reiterated early French efforts to squash the trade deal. Such views come because France will have its own presidential election in spring 2017 and apparently TTIP would aid the opposition. http://www.euractiv.com/…

Such comments seem to run counter to talk among EU trade negotiators who claim there remains strong interest in the EU in concluding TTIP. EU Trade Commissioner Cecilia Malmstrom maintains TTIP could survive the Brexit vote also believed the Canadian trade deal was under the exclusive jurisdiction of the EU -- and not member states. She nonetheless acknowledged the "political situation" of the EU Council in turning that FTA over to individual country parliaments for approval. http://europa.eu/…

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