The Senate’s soon-to-be top Democrat told labor leaders Thursday that the Trans-Pacific Partnership, the trade deal at the center of President Obama’s “pivot” to strengthen ties with key Asian allies, will not be ratified by Congress.
That remark from Sen. Charles E. Schumer (D-N.Y.), who is expected to be the incoming Senate minority leader, came as good news to the AFL-CIO Executive Council, which met Thursday in Washington. Schumer relayed statements that Republican congressional leaders had made to him, according to an aide who confirmed the remarks.
Obama’s signature global trade deal had been on life support for months as both Democrats and Republicans campaigned against unfair trade policies ahead of the Nov. 8 election. And Donald Trump’s triumph in the presidential race cemented its fate.
“There is no way to fix the TPP,” Trump said in a June economic address. “We need bilateral trade deals. We do not need to enter into another massive international agreement that ties us up and binds us down.”
The deal never had much of a following among congressional Democrats to begin with. Only 28 of 188 House Democrats and 13 of 44 Senate Democrats supported granting Obama the authority to negotiate and finalize a deal last year. And Trump’s rise has decimated support for free trade among Republicans. A former U.S. trade representative, Sen. Rob Portman of Ohio, said he would oppose the TPP as he campaigned for reelection this year.
Senate Majority Leader Mitch McConnell (R-Ky.) said Wednesday there was no chance that the deal would pass during Obama’s final months in office. And he said it’s up to Trump whether any trade deal would move forward after that.
“I think the president-elect made it pretty clear he was not in favor of the current agreement,” McConnell said. “But he has the latitude because [congressional negotiating authority] is in place through the next administration to negotiate better deals, as I think he would put it, if he chooses to.”
House Speaker Paul D. Ryan (R-Wis.), who has supported past trade deals, has said that “the votes aren’t there” in the House to pass the TPP in its current version and that he has no plans to bring it to a vote in the House.
The news of the trade pact’s likely demise prompted disappointed reactions from some industry coalitions, which had hoped to access freer markets and a more level playing field with competitors overseas.
Among them were groups representing America’s farmers and ranchers. The TPP had promised to slash tariffs on U.S. agricultural goods in large markets such as Japan and Vietnam, as well as eliminate agricultural subsidies that gave competitors in the trade bloc an edge.
“We would have liked to get it done before the end of the year. The longer we delay, the more likely we lose market share in the Asia-Pacific since other countries are negotiating their own trade deals with nations in the region,” David Warner, the director of communications at the National Pork Producers Council, said in emailed comments. Warner said the TPP would exponentially increase pork exports, translating into more American jobs. “We certainly hope the TPP is not dead.”
Retailers had also largely thrown their support behind TPP, as it would have reduced tariffs on many goods that brands source from overseas. President Obama had even used Nike’s Oregon headquarters as backdrop for a speech defending his trade policy.
“On balance, [TPP] was viewed by our industry as a win for retailers and our consumers,” said David French, the National Retail Federation’s senior vice president of government relations, in an interview conducted Thursday prior to the news of Schumer’s statements.
French said he believes that the reduction in tariffs would have been passed on to consumers in the form of lower prices. Tariffs on footwear can be as high as 67.5 percent, according to the NRF, while apparel tariffs can be up to 32 percent.
In September, a coalition of retailers — including Walmart, JCPenney, Gap, Michael Kors and Dick’s Sporting Goods — sent letters to each member of Congress to urge them to support the TPP. The letter said the agreement would remove $2.8 billion in duties on U.S. imports of clothes, shoes and travel items such as backpacks. They called it “once-in-a-generation opportunity to reduce costs and open new markets for U.S. brands and retailers.”
Correction: A previous version of this story misstated the estimated dollar value of the duties on clothes and related items for retailers. It is $2.8 billion, not $2.8 million.