Trade: 2015’s Purple Issue?

March 31, 2015

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An alphabet soup of trade deals offer a chance to build a bridge.

There is no love lost between President Barack Obama, a Democrat, and the Republican majority in Congress. The political news is often flooded with words like gridlock and stalemate. However, there is one issue on the agenda that both the GOP and President Obama agree is a top priority: Passage of two international trade agreements currently under negotiation, the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).

If passed, these trade deals will impact nearly any company engaged in international business, from agriculture, to financial services, to consumer brands to the digital economy. Ambitions for these deals are high. They’ve been cited as the vehicles that will set the rules for 21st century international governance and will become the new norm for how countries trade and interact with each other.

TPP and TTIP are both close to completion, with final negotiations targeted for the end of 2015 or early 2016. Yet one speed bump remains along the way: congressional passage of Trade Promotion Authority (TPA), a bill President Obama’s own party has not yet backed. If TPA is not passed in April, it could unravel both trade deals.

What is TPA?

Trade Promotion Authority is the legislative procedure by which Congress defines U.S. negotiating objectives for the executive branch to follow during trade negotiations. Under TPA, Congress retains the authority to review and vote on any proposed trade agreement but limits its involvement to an up-or-down vote with no ability to amend.

Why is TPA so important?

TPA allows the Executive Branch to negotiate with other countries with the confidence that when the deal comes to the floor of the House and Senate for a vote, sections will not be altered at the last minute. In the absence of TPA, participating countries have no guarantees their compromises will be honored and are less likely to engage in negotiations. In fact, the inability of Congress to renew TPA legislation is cited as the main reason why both TPP and TTIP negotiations have stalled in recent months.

So what’s the holdup?

While the President and the Republicans in Congress are focused on getting TPA renewed, congressional Democrats are blocking TPA as a way of stalling progress on TTIP and TPP. Labor is a key voting block for many Democrats; and the AFL-CIO, a powerful U.S. labor organization, has pressured Democrats to avoid a vote on TPA. Other members of both parties are opposed to TPA legislation on constitutional grounds, arguing it gives too much power to the executive and disrupts the system of checks and balances.

When is TPA going to be voted on?

With the 2016 presidential campaign already ramping up, the window for passing TPA — and with it, the hope of passing both the TPP and TTP — is closing quickly. An April vote is the best chance President Obama has for seeing his two ambitious trade deals come to fruition during his presidency. The next few weeks will be critical as the world watches to see how Congress will vote.

What does this mean for our clients?

Although Washington is coming to consensus, the words “trade agreement” are still loaded in the minds of the general public. The persistence of a “NAFTA hangover” has trade supporters rushing to generate grassroots stories about how these new agreements will benefit American workers and consumers. Congressional and Administration leadership have been partnering with companies and NGOs willing to promote the trade deals and provide third-party surrogate voices that will better resonate with the American people. This platform, promoted and encouraged by the USTR, gives companies and NGOs high visibility and airtime, especially as the deals get closer to completion. Whether it’s incorporating trade into pre-established c-suite messaging, inserting organization leaders into panels and conferences or hosting events at an organization’s facility, there are countless opportunities to engage.