Washington Insider-- Tuesday

After TPP Agreement Reached, Now Comes the Hard Part

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Pro-Ethanol Bloc of Senators Urge White House to Boost RFS

A group of 14 senators -- a mix of Republicans and Democrats, mostly from ethanol-producing Midwestern states -- met with White House Chief of Staff Denis McDonough on Oct. 1 to make their case for an aggressive new ethanol mandate under the Renewable Fuel Standard (RFS). Three Republican senators from Iowa and South Dakota joined 11 Democrats at the Oct. 1 White House meeting.

"The last thing we should be doing is throwing the brakes on the progress we've made by rolling back the Renewable Fuel Standard," Sen. Amy Klobuchar, D-Minn., who helped organize the meeting, said in a statement. "The future of the biofuels and advanced biofuels industries depend on a rule that provides stability and predictability."

Sen. Dick Durbin, D-Ill., said in a statement, "When lawmakers from both sides of the aisle, representing states all over the country, come together to share a common concern, that really means it is time to listen. And I hope the Administration does."

EPA is due to finalize three years of RFS targets by the end of November.

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South Korea Reiterates Desire to Join TPP

As the 12 countries in the Trans-Pacific Partnership (TPP) agreement announce an overall agreement has been reached, South Korean officials again on Oct. 5 indicated their willingness to join the trade pact.

South Korea will "actively consider joining the TPP," Yeo Han-Koo, deputy chief of the trade ministry's office of TPP told The Wall Street Journal. "We welcome the agreement. It is important for the TPP to develop into an open, transparent and inclusive platform."

In a statement, the ministry said it would thoroughly analyze the impact of joining the TPP on the national economy. South Korea already has free trade agreements with 10 of the 12 TPP nations but is concerned that Japan could garner additional advantages in areas like autos and electronics.

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Washington Insider: After TPP Agreement Reached, Now Comes the Hard Part

Press reports of a Trans-Pacific Partnership (TPP) deal came flooding out of Atlanta Monday morning following marathon negotiating sessions on Saturday and Sunday. Politico reported that negotiators from the U.S., Japan and 10 other Pacific Rim nations clinched "the biggest trade pact in recent history, setting the stage for President Barack Obama to send the deal to a divided Congress early next year."

Long in the making, the deal came together after hundreds of hours of tense negotiations, climaxing in round-the-clock talks in an Atlanta hotel. Politico notes that the TPP is key to Obama's "pivot" to Asia, "aimed at anchoring the United States in a region increasingly dominated by China."

The good news seems to be that the trade ministers stayed well beyond their expected departure times to make the final, difficult concessions on auto, dairy and drug protections, among many others. The not-so-good news is that almost every issue in the deal is controversial and will be very closely scrutinized by the U.S. Congress and also by the legislatures of other nations.

The deal will go to the U.S. Congress, but not right away. It may be February or later before the President officially gives Congress the legally-mandated 90-day notice that he intends to sign it.

The main story in the press focuses on concessions that continue to be unpopular for many. For example, while business groups have pushed for comprehensive tariff cuts and strict intellectual property protections throughout the talks, many urged more substantial "monopoly" protections for medicines called biologics, an area where U.S. negotiators had to settle for less than they wanted. There were others, including dairy, early reports indicate.

Still, the administration is banking that the overall economic heft and geostrategic importance of the agreement will overcome concerns about individual provisions, although realists recognize the new deal sets the stage for another potentially bruising battle in Congress, following this summer's debate over trade promotion authority, which was narrowly approved. That law allows the administration to submit the TPP deal itself to Congress for straight up-or-down votes without amendments, greatly easing its chances for approval. But, at least theoretically, lawmakers could strip that "fast track" provision if they feel the administration has not followed Congressional negotiating objectives.

The AFL-CIO labor federation and many environmental groups lined up in opposition to the fast track trade bill when that was debated, but the administration now hopes what it describes as groundbreaking labor and environmental provisions will soften the opposition if not completely quiet it. "TPP will put American workers first by including the strongest enforceable labor standards of any trade agreement in history, including in areas like child labor and forced labor and wages," an administration spokesman said. Observers say most labor groups remain in opposition.

There are others, as well. No country wanted to make a final offer on dairy, for example, until it could be certain that a TPP agreement would be reached.

So, what's next? Ratifications by U.S. and other countries will take time. Still, the agreement is a victory for President Obama, who has touted the TPP as part of his administration's rebalancing of foreign policy toward fast-growing economies in Asia.

The draft text must be published long before the agreement is signed and the U.S. International Trade Commission, an independent agency, has up to 105 days to produce an economic impact assessment. In this scenario, it would be next spring or even later before Congress could vote on the package, with some sources stressing that is the earliest time that a vote could be expected is in a 2016 lame duck session of Congress.

Well, this looks like progress. Still, there are many highly controversial steps ahead of actual ratification and opponents are deeply dug in. The deal could expand markets for U.S. producers, but should be watched closely as the approval process proceeds, Washington Insider believes.


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(GH/SK)