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Congress, midterms and the TPP

Congress, midterms and the TPP

US mid-terms elections will take place on 4 November, with polls suggesting the Republicans will re-take control of the Senate. President Obama's next steps on the Trans Pacific Partnership (TPP), which his Administration says is the key economic plank of the rebalance to Asia, will be heavily influenced by the outcome of this election. A Republican majority probably bodes well for President Obama's chances of finalising the TPP.

President Obama delivering the State of the Union address, 28 January 2014.

As a key component of Obama's foreign policy legacy, the rebalance to Asia enjoys more or less bipartisan support. Congress understands the necessity of it, though it has from time to time put forward ideas about how it might be alternatively resourced.

Free trade, however, does not attract broad bipartisan support. Complicating matters, Congressional assent is required for ratifying trade deals; the Republicans are traditionally pro-trade, whereas the Democrats are not. When negotiations heat up, a wide range of well organised and resourced interest groups apply targeted pressure to members of Congress, which leaves those from trade-sensitive electorates vulnerable to a backlash from campaign funders and constituents if they come out in support of trade. 

Consequently, trade policy debates in the US tend to be more divisive than in Australia, where a bipartisan consensus is by now broadly entrenched. This is despite a recent Pew Research poll showing that a majority of Americans say they support free trade (even if they are not quite as optimistic about it as some other countries). 

Another striking difference between the Australian and American conversations about TPP is that in the US, the economic rationale for the deal only forms one part of its overall appeal. All branches of the US government see the TPP as a crucial geopolitical move that will cement American economic power in the Asia-Pacific region. A common refrain in Washington DC foreign policy circles is that 'the rebalance is in serious trouble without TPP'. [fold]

The unfortunate confluence of all these factors means the TPP sits at the uncomfortable nexus between US foreign policy and domestic constituency politics. Even members of Congress who understand the geopolitical imperative of the rebalance are unlikely to cast their vote with the US national interest on their minds. Instead, members' votes will largely be cast based on the putative impacts trade agreements will have on their electorates.

President Obama has not enjoyed a particularly good relationship with Congress and has been widely criticised for his lacklustre approach to pursuing the TPP. His sharpest critics say that, for a President who has placed the rebalance to Asia at the centre of his foreign policy, he has been decidedly unwilling to spend political capital on bringing it to reality. One Senate staffer quipped recently, 'it's clear when the President wants something, and it's not clear he wants this.'

Because of the way the legislative process works in the US, presidents generally need Congress to give them Trade Promotion Authority (TPA) before they can finalise a deal, otherwise it risks being picked apart by Congress, leaving it open to unlimited amendments on any subject. TPA, also known as 'fast-track authority', gives the President a set of parameters within which to negotiate and ensures a simple yes or no vote on the final bill. 

Granting of TPA, sooner rather than later, would be a confidence boost for other TPP member countries, reassuring them that any agreement would be likely to pass Congress and therefore worth their own domestic political pain. But Obama has not moved to secure TPA yet, and some commentators are beginning to speculate that he will simply submit the TPP, as a bill, to Congress. This would mean that members get to have it both ways; they'll be able to say they support the deal and the rebalance, while voting down the bill for specific reasons.

Perhaps encouragingly, potential presidential candidates from both the moderate and conservative wings of the Republican Party have highlighted free trade as one of a handful of issues they would be willing to work on with Obama after the mid-terms. This would also give Republicans, many of whom have spent the past two years ensconced in 'Nobama' campaigning, a chance to demonstrate that they have a positive agenda and are ready to govern.

On the Democratic side of the house, Obama was apparently chastened by Democrat Senate Majority Leader Harry Reid's emphatic rejection of his trade agenda earlier this year. In line with Reid's reprimand, Obama's recent low-key approach to the TPP is an apparent attempt to insulate Democrats from losses in tight House and Senate races. Nevertheless, a solid handful of those re-elected will need to commit to supporting the TPP if the President is to have a chance of persuading Republicans to back the deal (even though Republicans are generally pro-trade, they will face blowback too).

Meanwhile, as the Administration appears to tread water, US trade diplomats from the United States Trade Representative (USTR) are working overtime on advocacy. US Trade Representative Michael Froman has written pro-TPP articles for both the Financial Times and Foreign Affairs in recent weeks. USTR negotiators have been working intensively with their Japanese counterparts in Washington DC last month, and in Sydney this month, on some of the agreement's most sensitive elements. 

But most observers agree that leaving the heavy lifting to bureaucrats will not finish what is increasingly a political job for the White House. Finalising the TPP will require the type of political compromise that has eluded President Obama since his 2012 re-election. A Republican majority in both houses, while otherwise corrosive to his agenda, means he has a greater chance of doing the deal if he can find an acceptable way forward. But this won't come easily, and a strong possibility remains that Republicans won't be able to resist kicking the President while he is down.

Optimists are looking for a sign after the mid-terms, when it becomes clear who will control the Senate, whether Obama will come out all guns blazing in pursuit of his foreign policy legacy on the rebalance to Asia and, within that, the TPP. They hope he will move quickly to ask Congress for TPA before empowering his negotiators to brace for the end game. 

Pessimists, on the other hand, don't think he has the 'ticker' to broker the compromise, leaving US TPP partners, including Australia, high and dry. 

Regardless of whether Australia sees finalising the TPP as a crucial component of the rebalance to Asia, it would be a shame to see five years of negotiations sacrificed to US Congressional politics. We should also, therefore, keep watching closely for a sign that President Obama is ready to spend political capital on cementing his foreign policy legacy.

Photo courtesy of the Flickr user The White House.

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