News analysis

Deal faces potential hurdles in key member countries

 US President Barack Obama speaks about the Trans-Pacific Partnership agreement at the Agriculture Department in Washington, DC, on Oct 6, 2015.
US President Barack Obama speaks about the Trans-Pacific Partnership agreement at the Agriculture Department in Washington, DC, on Oct 6, 2015. PHOTO: AFP

The Obama administration may be hailing the 12-nation Trans-Pacific Partnership (TPP) free trade agreement as a historic victory, but it is far from a done deal among some key players, say analysts.

Details of Monday's agreement are yet to be made public and on both sides of the Pacific, it still faces potential hurdles when sceptical legislators examine its merits during a 90-day review and ratification process.

The TPP needs to survive the United States legislature at a time when the political climate could not be more complicated. Nearly every observer who spoke to The Straits Times prefaced their remarks with the same words: "If it passes Congress."

Meanwhile, Malaysia's embattled Prime Minister Najib Razak will have to convince his MPs that the agreement would "ensure Malaysia's positions and interests are safeguarded", as stressed by International Trade and Industry Minister Mustapa Mohamed.

The Malaysian opposition has repeatedly raised questions over whether the deal benefits Malaysia, given concerns over steep protection of intellectual property, especially the cost of medicine, the status of state-owned enterprises and government procurement in terms of preferential treatment for Malay and bumiputera communities.

CONGRESSIONAL NOD NOT A GIVEN

The TPP needs to survive the United States legislature at a time when the political climate could not be more complicated. Nearly every observer who spoke to The Straits Times prefaced their remarks with the same words: "If it passes Congress."

Mr Wan Saiful Wan Jan, head of policy think-tank Ideas, told The Straits Times that if the TPP became a source of controversy in Parliament, Datuk Seri Najib would sacrifice it if it endangered his leadership.

In Japan, the signed treaty must be examined by both Houses of Parliament, Kyodo News reported, and Bills will be deliberated separately if the contents of the TPP require revisions to existing laws.

The government is considering holding an extra Diet session through early next year, according to people close to the administration. A failure to complete the necessary legislative process during the extra session could cause several months of delay.

The deal has become a politically loaded subject in Canada in the run-up to tight Oct 19 elections. Prime Minister Stephen Harper's rivals have raised concerns about opening Canada's mostly closed dairy sector and losing its status as a favoured supplier of auto parts to the US auto industry, Agence-France Press reported.

The main opposition New Democrats say if they form the next government, they will not feel bound by the TPP's terms, Reuters reported.

In the US, where President Barack Obama has to give Congress 90 days' notice of his intention to sign the accord, the major concerns are twofold.

First, the agreement comes amid Republican Party uncertainty about the future of its leadership and, second, the vote on the deal will take place during the heat of a presidential election campaign.

Dr Patrick Cronin, senior director of the Asia-Pacific Security Programme at the Centre for a New American Security in Washington, stressed that approval needs to happen before the presidential campaign begins in earnest.

Already, the review period likely pushes the earliest lawmakers can vote on it till after the first presidential primaries in February.

"If they can't pass it quickly, within a month of the end of the review period, it will languish and people will pick at it, and it may not happen until after the election," Dr Cronin said.

The election year, he noted, can put particular stress on a controversial issue like this as politicians tend not to take risks.

"Even (former secretary of state) Hillary Clinton, who everybody knows is really in favour of this, is essentially saying she is not," he said.

The relative secrecy of negotiations thus far also means it is difficult to predict what elements of the deal could become a stumbling block.

"To date, many members of Congress with specific concerns and interests in the TPP have had very little input into the negotiations, and the draft texts have not been shared with voters, so the text, though agreed with the negotiating partners, faces close scrutiny domestically," said Ms Lisa Sachs, director of the Columbia Centre on Sustainable Investment at Columbia University.

The opposition of Senator Orrin Hatch, the Republican chair of the Senate Finance Committee, is also a worrying sign for TPP support in Congress.

A version of this article appeared in the print edition of The Straits Times on October 07, 2015, with the headline 'Deal faces potential hurdles in key member countries'. Print Edition | Subscribe