(Reuters) — Delays in finalizing U.S. legislation to speed free trade deals through Congress are casting a cloud over a 12-nation trade pact many thought was near completion.
Officials from six countries in the Trans-Pacific Partnership said the lack of clarity over the conditions Congress would impose on U.S. negotiators was a stumbling block for the talks, frustrating some of the U.S.’s major trading partners.
The partnership is a key part of the U.S. “pivot” to Asia.
Canada and Japan are insisting on trade promotion authority legislation, which allows lawmakers to set objectives for trade deals in exchange for a yes-or-no vote, before closing the deal, said a source from one of America’s negotiating partners who has direct knowledge of the talks.
Japanese economy minister Akira Amari has also said it would be difficult to reach a U.S.-Japan agreement, a key stepping stone to the wider deal, without trade promotion authority.
“You don’t want to do a deal and then the next day they tell you that what was agreed is not enough,” the source said.
“So to avoid this risk, Japan and Canada are saying, ‘get the TPA and we’ll close the next day.’ “
Senate finance committee chair Orrin Hatch, a Republican, and the committee’s top Democrat, Ron Wyden, are at odds over Wyden’s push for Congress to have a greater role in deciding whether final deals pass muster, which may help win over trade-skeptical Democrats.
Hatch said an agreement with Wyden was unlikely until after Congress returns from a two-week break in mid-April, and Senate majority leader Mitch McConnell said he hopes a bill can move quickly then.
Once a bill is introduced, other lawmakers have their own pet issues, and trading partners fear a long process of amendment and counter-amendment to a bill that Hatch had hoped to present in February.
“Everyone is now drawing up their lists and they’ll say, ‘I’m giving you TPA, but you have to respect all these criteria,’ “ a non-U.S. trade official said.
“If we start (the process of getting TPA) state by state, and a congressman is asking for this and that, do you know how many trade-offs there would be?”
New Zealand trade minister Tim Groser said he did not know whether the lack of trade promotion authority was a genuine argument or a “facade.”
Still, the only way to remove the hurdle was to pass the authority, he said.
A source familiar with Japan’s stance said given the current situation, it was unclear when Japan and the United States could reach a side deal on farm and auto exports, another stumbling block to finishing the wider deal
“It is too far-fetched to say a deal is almost done. I’d not say we are very far apart, but I’d say there are still very serious issues pending that require a solution, which I don’t see,” the source said.
The first official said TPP members were working toward a ministerial meeting on the sidelines of an Asia-Pacific Economic Cooperation trade ministers’ meeting in the Philippines May 23-24. That could be an opportunity to close the deal.
Apart from the trade promotion authority and the Japan-U.S. agreement, “I would say we are very close, we are really close,” the official said.