The Trans-Pacific Partnership has been officially signed by its 12 member nations in a ceremony in Auckland, New Zealand, but the historic trade deal has a long way to go before going into full effect.
President Obama was not on hand for the signing, but instead sent U.S. trade representative Michael Froman on his behalf. Froman arrived in New Zealand on Tuesday for meetings.
Back in October, negotiators agreed to the terms of the TPP in Atlanta, and just a month later the text of the agreement was released. About 40 percent of the global economy is pulled together with the deal, which is largely considered to help rival China’s growing influence in the Asia-Pacific region. China isn’t a part of the deal.
For footwear and apparel, the deal begins to chip away at high tariff rates specifically opening up markets for more production in Vietnam and expanding the market for U.S.-made goods in Japan. One estimate by the Footwear Retailers and Distributors of America puts tariff savings as high as $450 million in the first year of the deal.
“This historic trade agreement will provide significant savings to footwear consumers and companies once passed and implemented,” said FDRA president Matt Priest. “Delaying consideration of TPP until the limited time frame of a lame-deck session of Congress puts at risk an agreement that would grow the economy and strengthen American leadership in a critical region of the world.”
It’s quiet timing for the ceremony, which comes nested between the Iowa Caucuses on Monday and next Tuesday’s New Hampshire primary. With much attention shifting toward the presidential campaigns in the U.S., the administration and supporters are crafting a strategy to move the bill through Congress before becoming a lame-duck session.
It’s unclear, though, if even Congress will be willing to take up the approval process soon. Senate Majority Leader Mitch McConnell indicated yesterday after meeting with the President and Speaker of the House Paul Ryan that he had some “concerns” about the agreement and indicated some trepidation on his part about taking action on substantial legislation this session and jeopardizing members up for reelection.
White House Press Secretary Josh Ernest said yesterday that the White House was “bullish” on passage of the TPP thanks to “strong bipartisan support.”
Next steps for the deal after today are complicated. From the date of the signing, member nations have two years to approve the deal at home. If the two years pass without all members ratifying the deal, it then depends on the two largest economies (U.S. and Japan) and four other member states to sign off so it can go into effect.