Pacific Trade Pact Clears Senate, Philippines Want In

The Philippines says it wants to join the Trans Pacific Partnership on the day it clears the United States Senate.

Vice President Joe Biden and President Barack Obama meet in the Oval Office of the White House in Washington DC, August 27, 2014
Vice President Joe Biden and President Barack Obama meet in the Oval Office of the White House in Washington DC, August 27, 2014 (White House/Pete Souza)

The United States Senate voted on Wednesday to give President Barack Obama the authority he needs to negotiate a trade agreement with eleven other Pacific nations.

The Philippines, a key American ally in Southeast Asia, said the same day it was interested in joining the pact.

Obama’s legislative victory came after his own Democrats had stalled for weeks, seeking higher subsidies for workers whose jobs may be displayed by trade.

Many Democrats and their allies in the trade unions fear the Trans Pacific Partnership will depress wages in the United States and cause more manufacturing jobs to be outsourced to Asia. Their resistance has forced Obama into an alliance with pro-trade Republicans who have otherwise opposed most of his policy.

Last week, the Republican majority in the House of Representatives voted to give Obama “fast track” authority to negotiate a treaty.

The New York Times reports that Wednesday’s vote does not guarantee the trade talks will be successful. But the administration feared that without “fast track” — which prevents lawmakers from meddling in the negotiations — major trading partners like Australia and Japan would refuse to make politically precarious compromises necessary to complete the deal.

Australia is wary of pharmaceutical demands for access to its government-run health insurance program while Japan has dragged its feet on dismantling powerful agricultural cooperatives and high subsidies that shield its farmers from international competition. Without the certainly that America, the bloc’s largest economy, is committed to Pacific free trade, neither state would likely have been in a hurry to make sensitive reforms.

The pact is the economic centerpiece of Obama’s “pivot” to Asia and would liberalize 40 percent of world trade. Supporters say the treaty, if enacted, will boost global economic output by $220 billion over the next ten years.

The trade effort is also meant to bring China into the existing liberal world order rather than have it attempt to create a competing, presumably more authoritarian, order under its own leadership.

China isn’t part of the talks. But a successful treaty would pressure the country — which is expected to overtake America as the world’s largest economy within the next few years — to meet its standards and stop trying to game global trade to impede foreign companies.

Besides Australia, Japan and the United States, the negotiations involve Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Colombia, South Korea and Taiwan have expressed an interest in joining while the Philippines confirmed on Wednesday it wanted to become part of the pact. In remarks reported by The Diplomat, the island nation’s trade secretary, Gregory Domingo, told a strategy conference in Washington DC, “I want to state clearly and irrevocably that we want to join TPP.”

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