Washington is ready to tackle the Trans-Pacific Partnership, gearing up for a big debate by industry groups, business leaders and influential players in the coming weeks.
Starting Wednesday, the U.S. International Trade Commission will hold a three days of hearings on the trade deal, which would lock together 40 percent of the world’s economy through 12 member nations in the agreement.
Yesterday, Rep. Sander Levin, D-Mich., ranking member of the House Ways & Means Committee, hosted a panel discussion to review the deal and a study authored by Ways & Means Democratic staffers analyzing the TPP’s potential pitfalls. The study focused on the hot topic of currency manipulation.
The deal, which was finalized in October after five years of negotiations (the text was released fully in November), could be a boon for footwear manufacturers as tariffs in Vietnam and other nations are lifted.
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Already, big endorsements have come through, including the U.S. Chamber of Commerce, which threw its hat in the ring supporting the deal Wednesday.
“No trade agreement is perfect, and the TPP is no exception,” said Chamber CEO Thomas Donohue. “However, the benefits of a trade agreement lie in how it is interpreted, implemented and enforced. [We’ll work] with the administration, Congress and our TPP partners to ensure the agreement is implemented in a way that maximizes its commercial benefits, including market access, rules, and intellectual property protections.”
Besides sides being taken, key issues are emerging.
Initially, regulations on currency manipulation were considered a key issue to get Congress to approve the President’s trade-negotiating powers over the summer, but they were abandoned as a compromise to get the trade-powers bill passed. Now, legislators and movers and shakers like Ford and the United Auto Workers are getting ready to push for additional protections from countries that hold their currencies artificially low, which they argue has forced U.S.-based jobs abroad, singling out countries like China and Japan as historically holding prices down.
In Rep. Levin’s TPP study, released yesterday, he argues that the trade deal fails to clarify exactly what constitutes currency manipulation, nor does it offer meaningful protections, though the authors do applaud increased transparency about monetary practices by the various member states. The study also doubts that U.S. monetary policy would be jeopardized if there were more stringent requirements about currency manipulation because the U.S.’s policies currently don’t fall under the IMF’s definition.
“The TPP Declaration does not contain any further language that defines currency manipulation. … It is unclear how the TPP Declaration will improve on the status quo,” says the paper.
The issue is expected to be an important one as supporters and opponents buckle in for the approval process, which is still months away. The soonest Congress could even hear the agreement is in the spring.
Already, more than 60 witnesses have requested to speak during the Trade Commission hearing next week, and in preliminary comments, sides and arguments are starting to become clear.
The Footwear Retailers & Distributors of America, Gap Inc. and U.S. Fashion Industry Association are supporting the deal and have filed public statements with the USITC ahead of the hearing.
“The Trans-Pacific Partnership will provide significant tariff relief for an industry heavily and disproportionally burdened by duties,” wrote the FDRA in its public comments ahead of the trade commission hearing next week.
The opposition, from Ford Motor Co. to the AFL-CIO, have also asked to weigh in. Rep. Levin, whose district includes Detroit, is scheduled to speak first at next week’s hearing.