Hogan Lovells
On October 4, 2015, trade ministers from 12 Pacific
Rim countries announced the conclusion of the Trans-Pacific Partnership
agreement (TPP). TPP, a foreign policy legacy item for the president,
represents nearly 40% of the world’s GDP. The agreement now requires
congressional approval, using the “fast-track” process in the trade promotion
authority bill (TPA) signed by President Obama in June. Although TPP needs only
a simple majority in each House to pass, shifting coalitions signal a difficult
political terrain. The TPP debate is important for any company involved in
international trade and investment.
Process and Politics
When President Obama submits TPP to Congress, the implementing legislation will
follow the procedures provided by TPA. TPA provides for special, expedited
consideration of trade agreements by Congress. It sets specific deadlines for
votes, limits debate, and allows no amendments. This is particularly important
in the Senate, where filibusters and the amendment process can slow and even
kill legislation.
Even with these special “fast-track” procedures, the political terrain for
legislation implementing TPP remains difficult. In the past, the
traditional coalition for passing legislation implementing free trade agreement
consisted of a large number of Republicans and a limited number of
business-oriented Democrats. However, Democratic support may be even more
difficult to find in the 2016 presidential election year, when the Democratic
Party candidate for president is likely to oppose the agreement. Former
Secretary of State Hillary Clinton, for example, has said that the TPP
agreement did not “meet my standards.” Representative Ron Kind (D-Wis.),
chairman of the New Democrat Coalition in the House, has expressed optimism
that more Democrats will support TPP once they see the agreement than the
numbers that voted for TPA. But that may be difficult in a politically
sensitive election year, as President Obama increasingly becomes a lame duck
President.
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