President Barack Obama and leaders of 11 other countries are set to get directly involved with negotiations over the Trans-Pacific Partnership — potentially the largest trade deal in U.S. history — when they meet in Bali next month, U.S. Trade Representative Michael Froman said on Thursday.
“I think we envisage the leaders will get together and talk about the major outstanding issues (in the Trans-Pacific Partnership talks) and whether there need to be packages put together to create a balanced outcome,” Froman told reporters at a breakfast hosted by the Christian Science Monitor, in Washington, D.C.
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The proposed TPP pact includes the United States, Japan, Canada, Mexico, Australia, New Zealand, Singapore, Vietnam, Malaysia, Brunei, Peru and Chile.
It would be the largest U.S. free trade agreement to date, covering nearly 60 percent of the global economy, and is expected to cover issues not included in previous pacts, such as rules for state-owned enterprises and digital trade.
After more than three years of negotiations, the Obama administration is pushing to close the agreement by Dec. 31, raising concerns in the business community and Congress about what will, and will not, be in the pact.
Froman said the goal for the meeting between Obama and other TPP country leaders at the Oct. 7-8 Asia-Pacific Economic Cooperation summit, in Bali, would be to reach a “political level agreement” for negotiators to flesh out.
Earlier this week, a bipartisan group of 60 senators urged Froman and U.S. Treasury Secretary Jack Lew to include “strong and enforceable” rules against currency manipulation in all future trade agreements. That followed a similar letter in June signed by 230 members of the House.
The effort was largely aimed at Japan, which has rattled Detroit-based automakers by joining the TPP talks. Ford, Chrysler and GM have accused Tokyo of driving down its currency to give its exporters an unfair price advantage. But most economists stop short of calling Japan a currency manipulator since the Japanese Central Bank’s actions are mainly directed at reviving the domestic economy.
Asked several times whether the United States plans to pursue currency rules in the agreement, Froman said the administration also is concerned about currency manipulation but was still consulting with Congress and other stakeholders on “the best way to proceed.”
Froman confirmed that the United States had not yet raised currency in the TPP talks and did not directly answer a question about whether it was possible to introduce a major new demand and still finish in three months.
Meanwhile, other issues in areas such as agriculture, labor, investment and intellectual property also need to be resolved before a deal can be reached.
Last week, the U.S. Chamber of Commerce, the Emergency Committee for American Trade and seven other U.S. business groups in an open to letter to all TPP countries said they were worried, based on the progress to date, that the final deal would fail “to achieve the level of ambition pledged by the governments.”
Froman downplayed those concerns on Thursday, saying that it was hard for business groups to judge from the outside how much work has already been done.
“We have teams working around the clock, around the world to further make progress on the outstanding issues. There’s good momentum behind closing out issues that can be closed out and teeing up the issues that require political level input so that we can begin to formulate landing zones for those packages as well,” Froman said.
Froman also repeated the administration’s desire for Congress to approve a bipartisan bill to give the White House new “trade promotion authority.”
That legislation would allow Obama to submit the TPP pact to Congress for a straight up-or-down vote without any amendments. In addition to expediting passage, it assures other countries that any deal they strike with administration won’t be picked apart by Congress.
The top Democrat and Republican on both the Senate Finance Committee and the House Ways and Means Committee have been working for months on a bipartisan trade promotion authority bill, but there still is no clear sign when they will produce a final package.
One key issue in those deliberations is whether to follow the advice of a majority of both the House and the Senate and include a provision requiring the administration to seek currency rules in trade pacts.
Froman said the “precise timing” of any action regarding trade promotion authority was up to Congress but also indicated he expected the debate to occur in the coming months.
“The fact that (trade promotion authority) will be debated in the context of TPP coming together allows people to see … what advantages there are in its passage and hopefully will contribute to further momentum,” he said.
Obama to dive into Pacific trade talks
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