And now the other TPP battles begin

Shawn Donnan in Atlanta

With the announcement that ministers have agreed on the terms of a vast new Pacific Rim trade zone after five years of negotiations, US President Barack Obama has scored a major victory on a key component of his economic legacy.

But the battle is far from the last one Mr Obama faces to make the 12-country Trans-Pacific Partnership a reality. Ahead lies what looks likely to be another hard-fought political battle next year to get the agreement through Congress, with some of the Republican allies Mr Obama has counted on in the past on trade becoming annoyed over key concessions the US was forced to make to secure a deal.

It will also take place against the backdrop of a presidential campaign which, with Donald Trump as Republican frontrunner, has seen an increase in protectionist rhetoric.

“The Trans-Pacific Partnership is an attack on America’s business,” the billionaire property developer said earlier this year. “This is a bad deal.”

Mr Obama is not alone. Canada’s Stephen Harper faces an election on October 19 in which he is locked in a three-way tie, with one of his opponents vowing to tear up anything he has negotiated. In Japan, Shinzo Abe’s popularity is slumping just as he faces the daunting prospect of getting the TPP through the Diet. Even in single-party Vietnam a leadership change looming in 2016 means it faces its own political challenges over the TPP.

The deal unveiled after five days of around-the-clock talks by ministers still faces procedural — and political — hurdles in the US.

Mr Obama has to give 90 days’ notice to Congress that he intends to sign any trade deal, meaning he cannot do so before January at the earliest. Other requirements mean that it could easily be the middle of the year before Congress takes up any bill.

The president this year relied on Republican support to overcome Democratic opposition and secure the “fast-track authority” he needed from Congress to close the TPP, which is the biggest trade deal struck in two decades.

So the bigger issue for Mr Obama may be that Republicans are annoyed by compromises US negotiators have made in recent days by excluding the tobacco industry from an investment dispute system and agreeing to shorter monopoly exclusions for next-generation drugs known as “biologics”. They also have been frustrated by the Obama administration’s pushing of issues — such as tough labour standards for Vietnam — requested by some of the same congressional Democrats who this year sought to block the deal altogether.

That has raised the possibility that Mr Obama may not be able to count on the Republican leadership to push a TPP through a Congress they control as aggressively as he might want.

“You have to dance with the one that brought you,” said one Republican.

Orrin Hatch, the influential Republican chairman of the Senate Finance Committee, on Monday said the deal fell “woefully short” of what he had hoped.

“Closing a deal is an achievement for our nation only if it works for the American people and can pass Congress,” he said. “While the details are still emerging, unfortunately I am afraid this deal appears to fall woefully short.

“The Trans-Pacific Partnership is a once in a lifetime opportunity and the US should not settle for a mediocre deal that fails to set high-standard trade rules in the Asia-Pacific region for years to come.”

Administration officials believe that once the entire TPP agreement is laid out for the Republican leadership any reluctance will evaporate, and liken it to the business community, which has continually expressed broad support for the project even as the pharmaceuticals industry and others groan about some of its provisions.

They also believe that some of the provisions in the TPP, such as its strong labour and environmental chapters, and a bid to at least address Democratic concerns about possible competitive currency devaluations by some US trading partners, could win over Democrats who voted against the president this year.

Mike Froman, the US trade representative, said the deal would lead to important advances “in terms of setting high standards for this region.”

But the fact remains that Mr Obama is unlikely to draw enough support from his own party to get the TPP through Congress, and that illustrates the curious situation faced by a president long reviled by many Republicans, as he tries to secure his economic legacy.

“There has been a longstanding tension in that the Obama administration’s heart is with the Democrats . . . but their votes are coming from the Republicans. That makes for a very odd dynamic,” said Philip Levy, a senior fellow at the Chicago Council on Global Affairs.

A bigger question than that is whether, given next year’s presidential election, a protracted primary season and the current mood in Republican politics, there is even a political window to get the TPP through Congress.

Administration officials believe one does exist and argue that a TPP vote could easily be held before the middle of the year. But even if Republicans do rally around the TPP they might prefer to hang on for a Republican administration and one that might reopen the deal and address the issues they have — particularly if, as many experts believe, the TPP is likely to set a global precedent on key issues.

The deal is done. But a significant fight still lies ahead.