Trump trashes 'horrible' TPP

Republican frontrunner makes his sharpest attack yet on trade deal | Why US ratification matters | What's next in the primary race.

Republican front-runner Donald Trump used an overnight rally to sharpen his attacks on the Trans-Pacific Partnership (TPP). US ratification is needed for the trade deal to come into effect, with a vote expected in December at the earliest.

"It's a horrible trade agreement," Trump told a rally in Ohio, which will hold its primary on Wednesday NZ Time.

"You have 12 countries – all of whom want to rip our heart out. You have China, which is not a part of it but wants to be a part of it at a later date. They're watching every move."

"It's too complicated. It's too big. Each country knows every word of that document and our people have never even looked at it or read it. We don't know what the hell it says. We should not do it."

Mr Trump also says the trade agreement would cost US jobs and undermine sovereignty, echoing arguments used here by the likes of Andrew Little and Jane Kelsey.

Earlier, Mr Trump said China would use the TPP – whose full text has been widely distributed on the internet — to manipulate and trick the US. 

And with TPP negotiations stalemated in many areas, leading to an agreement that gives Fonterra precious little new access to North America, and US interests like Big Pharma and Hollywood only tiny gains in multinational powers, it's a stretch to say any country will be using it to rip another's heart out. 

Nevertheless, Trump's appeal to disaffected working class whites is central to his success. And nowhere is their vote so crucial in so-called "rustbelt" states like Michigan and Ohio, which are crucial to the Republican presidential nominee race and always loom large in general elections. Polls have Mr Trump neck-and-neck with Ohio governor John Kasich in his home state.

Trump romped home in Michigan by going in the exact opposite direction to the TPP, promising to slap huge tariffs on cars assembled by US automakers at plants in Mexico. The Republican establishment fretted it was essentially a Democrat policy, but it proved hugely popular. Noisy crowds are not at home to even vaguely nuanced arguments about such a policy driving up the price of Ford and GM vehicles to the advantage of European and Asian automakers (though maybe they could receive even greater tariffs in a Muldoon-ian cycle of driving car prices ever upwards, or a wall built to stop them arriving at American docks).

Where the others sit
Second-placed Republican Senator Ted Cruz also sharpened his attacks on the TPP this week.

During the candidates' debate on Friday NZ time, Cruz said, "I opposed TPP, and have always opposed TPP. We’re getting killed in international trade right now."

Earlier, the arch social conservative said the trade deal would undermine US sovereignty.

On the Democrat side, Hillary Clinton and Senator Bernie Sanders have constantly out-bid each other in their efforts to bash the TPP. Although as Sanders pointed out in a Michigan debate last week (before winning the state in an upset), Clinton did describe the TPP as a "gold-plated trade deal" in 2013. There are suspicions on the left that once elected, she would again flip sides (as Bill Clinton did with his ultimate move to support the North American Free Trade Agreement, or Nafta).

For now, however, Clinton aides have told US media she will  take a tougher stance on trade deals.

And it's interesting to note that such is the protectionist fervor that in the respective Republican and Democrat Michigan primaries (held on Wednesday), the success of the candidates across the two parties could be indexed to how anti-trade they are. Mr Sanders got the most votes overall, followed by Mrs Clinton then Mr Trump (who did face a four-way contest). The pro-TPP Kasich and Senator Marco Rubio trailed the field.

Moving toward the centre, a little
Trump won some guarded praised from the Republican establishment this week with a much lower-key debate performance and indications he is moving to the centre on immigration and torture – now styling his initial hardline policies as "opening bids" in a Trump-ian process of negotiating everything.

But the moderation only went so far. There were brawls at rallies, and on the key issue of trade, the brash New Yorker has only moved further from Republican orthodoxy.

Why US ratification matters
The TPP needs ratification by countries representing 85% of the GDP of original signatories to come into force. It can't reach that threshold unless US lawmakers approve the deal. Due to the extended, multi-step process* to get the enabling legislation in front of Congress, a ratification vote is expected in December or later. 

The TPP must be ratified by both branches of Congress (the House of Representatives and the Senate), then signed by the President. 

December will be the so-called lame-duck Congressional session, where the term-expired President Obama and any Congressman who failed to win in November still sitting before their formal departure in January. That means Obama could, in theory, push the TPP through then. Last year, the Republican majority in Congress did, after all, support the White House's bid for extended trading authority, helping to smooth the way for the trade deal's final negotiations. But recently, taking their cues from Messrs Trump and Cruz's wild success with protectionist policy, key Republicans in Congress have come out against the deal. Some pundits now think majority support has been lost.

After taking power on January 20, the new president will have the power to veto any legislation, including a law to ratify the TPP. A law can be passed by a simple majority in Congress, but two-thirds support (rarely achieved) is necessary to override a presidential veto.

A brokered convention?
Having survived a crude debate performance and sharp attack ads to win Michigan handily, it’s become hard to see any outcome bar Trump winning the Republican nomination. 

The next key moment will come on Wednesday NZ time when Florida (third-placed Senator Marco Rubio’s home state) and Ohio (fourth-placed governor John Kasich’s home ground) will hold primaries. Kasich would win Ohio but Rubio is well behind Trump in Florida polls.

However, it’s still possible Mr Trump will fail to get the 1237 delegates needed for a clear majority.

In that case, the Republicans will go to a brokered convention in July. That means that after the first round of voting, nearly all delegates will no longer be bound by the vote in their state; they’ll be free to vote for any candidate who ran in the primaries, or indeed anyone who puts themselves forward. 

An outsider candidate could have a real shot at the candidacy in a brokered convention, given Cruz is only marginally less popular with the party establishment than Trump, and Marco Rubio is widely regarded as too extremist to be electable in a general election – a fact masked by Trump’s antics and the mordant Mr Cruz, who have made him seem like the “normal” candidate. Some will be hoping that Michael Bloomberg, having ruled himself out of the primary race, could step into the fray at this point.

However, with most of the remaining states holding winner-take-all primaries, and Trump leading in the polls in most, hopes for a brokered convention are fading by the week.

 

Tune into NBR Radio’s Sunday Business with Andrew Patterson on Sunday morning, for analysis and feature-length interviews.


* To channel a Washington Post summary: The first steps begin when the White House formally sends Congress a notice of intent to sign the agreement, which kicks off a 90-day waiting period [this happened in the first week of November, 2015]. Congress gets to spend the first 30 days of that time privately reviewing the documents and consulting with the administration.

Next comes the public phase. The full trade deal will be open for anyone to review for 60 days allowing interest groups to provide feedback. This window will provide critical insight into how much popular support the deal may receive. A poor reception during the public phase could make it difficult for Obama to rally support when it comes time for Congress to vote.

The next step will be for the US International Trade Commission to conduct a full economic review of the deal. The agency has up to 105 days to complete that work but the process could take much less time.

Once the implementing bill is introduced in the House and the Senate, Congress has a maximum of 90 days to approve or disapprove the trade deal.

TPP boosters hope the Obama White House can accelerate this process to the maximum degree possible, but the norm is for a final-term president to have difficulty pushing through his agenda in his final few months.

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