Will the U.S. kill the TPP?

There is one important issue where it doesn’t matter whether Hillary Clinton or Donald Trump won this week’s U.S. presidential election.

Both candidates were dead set against passing the Trans-Pacific Partnership agreement, and that spells the end to the world’s biggest free trade deal, says an international trade lawyer.

“Even if other countries started to ratify it, without the U.S. it’s dead in the water,” said Lawrence Herman, counsel with Herman & Associates.

The U.S. presidential election took place after The Western Producer’s production deadline.

Trump has been vociferous in his opposition to the TPP. Clinton was initially in favour of the deal, calling it the “gold standard” of trade deals when she was secretary of state. She now says the deal does not meet her standards and is opposed to it.

“Without presidential support, it’s pretty difficult to see how the TPP can gain any traction after the U.S. election,” said Herman.

Even if the pact somehow miraculously received approval from the White House, it is unlikely it would have the support it needs in Congress, he said.

“The political opinion on open markets in the U.S. has changed. It certainly has changed in the U.S. Congress,” said Herman.

“Political winds have shifted.”

Claire Citeau, executive director of the Canadian Agri-Food Trade Alliance, remains optimistic that the TPP agreement will come to fruition.

“It’s not the first time that a trade deal has been caught in election rhetoric,” she said.

“I think that was the case with the NAFTA (North American Free Trade Agreement) back in the 1990s.”

It was merely weeks ago that observers were pronouncing the Comprehensive Economic and Trade Agreement dead, but the Canada-European trade deal was signed into law Oct. 30.

“When it comes to trade deals, it’s really not finished until it’s finished,” said Citeau.

CAFTA estimates the TPP could increase Canadian canola, pork, beef and barley exports by $1.5 billion a year by reducing tariffs. TPP countries account for 65 percent of Canada’s agri-food exports.

The deal would also limit countries’ ability to erect non-tariff trade barriers, which in some cases are more trade-restricting than tariffs.

CAFTA is urging the federal government to ratify the TPP and encourage other countries to follow suit.

Herman said the deal will be dead if the U.S. bows out. It requires ratification by at least six countries representing at least 85 percent of the total gross domestic product of the original 12 signatories.

That means the TPP cannot come into force if either the U.S. or Japan fails to ratify the agreement within two years of signing it because together they represent slightly less than 80 percent of the GDP of the signatories.

Robert Zoellick, former U.S. trade representative under former president George Bush, agreed with Herman that the TPP faces an uphill battle in the U.S.

“Democratic support for trade in Congress has withered over the years and now more Republicans in Congress are hesitating, too,” he said in a recent opinion piece for the Harvard Business Review.

He said president Barack Obama could have had the deal ratified if he hadn’t dropped the ball. Congress gave the president the trade promotion authority required for TPP approval in 2015.

“The supporters would have been able to pass TPP that year,” Zoellick said.

“If the president had acted a year earlier, the U.S. would have enacted the Trans-Pacific Partnership.”

The one lingering hope for the deal is during the lame duck session when Congress meets after the election but before the new president is sworn in.

However, Zoellick said Republican leaders probably no longer have the votes required to pass the TPP with an up or down vote in Congress.

“Passage of the TPP during the lame duck session is a long shot,” he said.

Herman said the demise of the TPP would be a serious blow for Canada’s agricultural exporters, but all would not be lost.

Canada could reactivate bilateral trade agreement talks with Japan, which is the real prize in the TPP agreement. Australia already has a free trade deal with Japan, and the European Union is working on one.

Citeau said the TPP is CAFTA’s top priority but acknowledged there needs to be a Plan B if TPP fails. She doesn’t want Canada to fall behind other nations, because that happened with a delyed agreement withSouth Korea. Canada lost half of a $1 billion agricultural export market virtually overnight.

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