Fast-Track Negotiating Authority May Spur Free Trade Agreements
On June 29, 2015, President Obama signed legislation that gives him trade promotion authority ("TPA") for the first time since 2007. Also known as fast-track negotiating authority, TPA provides President Obama with the authority to negotiate international agreements that Congress must either approve or disprove, but cannot amend or filibuster. Such authority, which will be in force until 2018 and can be extended until 2021, makes it more likely that negotiations of the Trans-Pacific Partnership ("TPP") and the Transatlantic Trade and Investment Partnership ("T-TIP") will result in new trade agreements.
The United States is negotiating the TPP with 11 other countries—Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. According to the U.S. Trade Representative ("USTR"), as a group, the TPP countries are the largest goods and services export market of the United States. The statistics are telling: (i) U.S. goods exports to TPP countries totaled $698 billion in 2013, representing 44 percent of total U.S. goods exports; (ii) U.S. exports of agricultural products to TPP countries totaled $58.8 billion in 2013, representing 85 percent of total U.S. agricultural exports; and (iii) U.S. private services exports totaled $172 billion in 2012, representing 27 percent of total U.S. private services exports. Many issues, such as those related to agriculture, intellectual property, and services and investments, remain unresolved among the 12 negotiating countries. TPA will provide President Obama with the authority to negotiate and resolve these issues, which is one of the primary goals of President Obama's trade agenda. A ministerial meeting aimed at finalizing the TPP is scheduled for the last week of July.
T-TIP is a proposed free trade agreement currently being negotiated between the European Union and the United States. According to USTR, the goal of T-TIP is to bolster the already strong relationship between these two strategic partners. Together, the parties represent almost half of global gross domestic product, nearly 30 percent of global trade in goods, and approximately 40 percent of global trade in services. The most recent round of T-TIP negotiations took place in New York in April 2015. The next round, which will be the 10th round of negotiations, is scheduled to occur July 13–17 in Brussels. Similar to TPP, TPA will provide President Obama with the authority to negotiate and resolve outstanding issues between the European Union and the United States under the T-TIP.
We will continue to monitor developments under the TPP and T-TIP in the wake of TPA. In the meantime, companies that trade internationally should be thinking about and preparing for how these free trade agreements may affect their business and, to the extent possible, how to benefit from opportunities they may create. We are available to assist in connection with any such efforts.
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Chase D. Kaniecki
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