A paper from the Center for Strategic and International Studies (CSIS) has urged US President Barack Obama to begin discussions immediately with the US Congress on Trade Promotion Authority (TPA), with the aim of achieving its passage by June this year and the completion of the Trans-Pacific Partnership (TPP) agreement shortly thereafter.

The CSIS pointed out that the TPP – currently being negotiated between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam – would create the largest free trade area in which the US participates, representing 40 percent of all US merchandise trade.

Renewed TPA, which last expired in 2007, would require the White House to consult extensively with Congress during trade treaty negotiations with the objective that US trading partners can be assured that concluded agreements would be fast-tracked through Congress.

The CSIS pointed out that, although TPP negotiations slowed in 2014 (due to US-Japan agricultural and automobile tariff issues), the commencement of TPA talks between Congress and Obama would provide proof of political leadership that would "resonate in other capitals, especially Tokyo, where trading partners are looking for evidence of an adequate political consensus in the US."

It was noted that leading Republican lawmakers have made it clear that trade agreements like TPP are an area of potential cooperation with the White House, but that, as Democrats still remain divided over trade policy, President Obama will have to "actively manage his party's politics." The CSIS insisted that "the next step belongs to the President."

"A realistic timetable for TPA is around six months," it concluded. "Even at this late stage, a successful grant of TPA would catalyze the [TPP] negotiations and give momentum for concluding the talks. Presuming a midyear passage of TPA, TPP could be concluded in the fall and an implementing bill presented to Congress later in 2015."

Source: Tax News

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