By Shawn Donnan (Financial Times)
If Republicans seize control of the Senate in next month’s midterm elections, it would be bad news politically for Barack Obama and his Democrats. But the dirty little secret in Washington is that it could be very good news for the US president’s trade agenda.
The November 4 elections are being watched carefully far from the US capital because the fate of two regional trade deals could hinge on the result of the vote. US negotiations with Japan and 10 other countries in the Pacific Rim are approaching a climax and, though talks are at a less advanced stage, proceeding apace across the Atlantic with the EU’s 28 member states.
The reality is that both deals need a trade-friendly Congress to go ahead and the hope is a Republican majority in the Senate may just give them that.
Mr Obama’s push in January for the congressional “fast-track” authority he technically needs to negotiate trade agreements ran headlong into the Senate’s top Democrat, Harry Reid, and has been stalled all year.
Since then, senior Democrats have made warmer noises about the prospects of granting the president what is formally called “trade promotion authority” in the event they hang on to the Senate. But the uncomfortable truth, even Democratic insiders concede quietly, is that Mr Obama’s trade agenda may be in safer hands if Republicans end up controlling the Senate.
Few in Washington expect any action on trade in the so-called “lame-duck” sessions of Congress immediately after the election. But, behind closed doors, Republicans on Capitol Hill say a new Senate that they control would likely grant Mr Obama trade promotion authority as soon as the first quarter of next year.
It would be an easy win for a Republican party eager to demonstrate ahead of 2016 elections that it can do more than just block the president’s agenda. Trade agreements, they point out, are something Republicans are traditionally more fond of than the Democrats who have their close ties to the US labour movement to consider.
Some parts of the Tea Party disagree and have in recent months joined activists from the left in the opposition to granting Mr Obama trade promotion authority, or what they have started to call “Obamatrade”. Doing so would amount to a recipe for “How to Give Obama More Power” was the message on signs carried by a small group of Tea Party activists who picketed a congressional committee meeting on trade last week.
The bigger risk, however, may lie in how the Obama administration handles its relationship with Capitol Hill on trade over the coming months.
Some Republicans have objected to the White House’s push to close the negotiations over the Trans-Pacific Partnership by a November summit of Asia-Pacific leaders in Beijing. They argue that without trade promotion authority the administration will not be able to secure the best deal possible and that it should wait for that to happen.
US trade officials are pushing forth regardless. Chief negotiators from the TPP countries gathered in Canberra on Sunday and are due to be joined by trade ministers on Saturday when the talks move to Sydney.
The negotiations have been billed as a key part of the TPP “end game” and everyone agrees a deal remains possible. But the truth is that it appears increasingly unlikely that Mr Obama will be able to claim a TPP victory in, or around, the Apec meeting in Beijing.
The biggest hold-up remains the inability of the US and Japan to conclude their increasingly tense bilateral negotiations over agricultural and auto products. But big gaps still remain on issues such as intellectual property and in the labour and environmental chapters of the TPP, say negotiators.
“The mood of the negotiators going to Canberra and then on to Sydney is not necessarily very optimistic,” says one Japanese official. “We don’t have any indication that the US will back down on a number of irrational demands they are making.”
The timing problems lie beyond just whether or not the TPP will be concluded next month. Because of the US political calendar, Mr Obama is starting to run out of time if he wants to complete the TPP – or the even bigger Transatlantic Trade and Investment Partnership with the EU – before he leaves office in January 2017.
The 2016 presidential race is likely to pollute efforts to secure trade promotion authority and congressional approval for the TPP if they do not happen in the first half of 2015, people on both sides of the aisle say. After that, the primaries that begin in January 2016 will simply be too close and Democrats likely be too shy about taking a controversial vote on trade, they argue.
“I think they are just running out of time,” says Deborah Elms, a Singapore-based trade expert who tracks the TPP negotiations closely.