ATLANTA — U.S. negotiators on Thursday closed in on a final agreement on an expansive Asia-Pacific trade deal, but congressional leaders cautioned that the accord should not be rushed to completion over fears that a subpar deal could lose support among lawmakers.
The Obama administration is hoping to cap a week of negotiations between the United States and 11 other nations with an announcement Friday that they have reached consensus on the Trans-Pacific Partnership (TPP), the largest free-trade and regulatory deal in a generation.
Touring a local mattress factory Thursday morning, U.S. Trade Representative Michael B. Froman said the trade accord would lower tariffs for U.S. exporters and help small- and medium-sized businesses hire more workers and pay them better wages.
“We want to focus on eliminating barriers,” said Froman, flanked by Atlanta Mayor Kasim Reed and the mayors of three other Southern cities. “There’s a lot at stake and we are not the only party out there. The Asia-Pacific region is home to 3 billion middle-class consumers over the next 15 years, so it’s important that the rules of the road in that region are defined in a way that plays to the interests and values of the United States.”
The negotiations, however, remained complicated by several sticking points, including differences over the length of copyright protections on pharmaceutical drugs, market access for dairy and sugar products and rules governing where automobiles are manufactured. And a new flash point emerged Thursday over an Obama administration proposal to restrict the ability of tobacco companies to access a proposed international dispute settlement panel.
Dozens of protesters, including some from Canada and Japan, rallied in a public park in downtown Atlanta, banging drums and holding signs reading “Stop the TPP.” They denounced the deal as secretive and non-democratic before marching three blocks to the Westin hotel, where the trade talks are taking place.
Industry lobbyists from several nations milled about the hotel. More than 140 journalists applied for credentials to cover the talks, according to organizers, though the negotiations are taking place behind closed doors.
President Obama has called the TPP a top economic and foreign policy priority, and his administration has been engaged in the talks for years. Administration officials are hoping to close the deal to capitalize on the momentum from the spring, when Obama won new “fast-track” trade powers from Congress that would help him get the deal ratified.
Under the terms of that legislation, Obama could sign a final TPP agreement within 90 days of the deal being concluded and then send it to Congress for a vote that cannot be subject to a filibuster.
Lawmakers warned Thursday that U.S. trade negotiators risked losing critical support for the accord if they capitulate on thorny issues in the final days of talks just to close the deal.
“The substance of the negotiations must determine their timing and eventual conclusion,” a bipartisan group of Senate and House leaders wrote to Froman. The letter was signed by Sens. Orrin G. Hatch (R-Utah) and Ron Wyden (D-Ore.), and Reps. Paul Ryan (R-Wis.) and Sander M. Levin (D-Mich.).
“We share the same deep concern that significant issues remain outstanding in the TPP negotiations that must be resolved so that TPP has sufficient support in Congress,” the lawmakers wrote.
Already, there were signs of eroding support. Republican Sens. Thom Tillis and Richard Burr of North Carolina on Thursday denounced published reports that U.S. negotiators had formally proposed exempting the tobacco industry from an international dispute settlement mechanism contained in the TPP that would allow corporations to sue nations over policies that damage their profits.
“The Obama administration is discriminating against an entire agricultural commodity, setting a dangerous precedent for future trade agreements,” Tillis said. “Trade agreements should not be laboratories for setting partisan policies and picking winners and losers. If any carve-out is ultimately included in the TPP, I will work hard to help defeat its ratification.”
Under the provision, the cases are heard by an international tribunal that rules outside of domestic legal systems. But opponents of such a mechanism, including Sen. Elizabeth Warren (D-Mass.), have pointed to cases in which tobacco companies have attempted to sue countries that have changed their smoking laws, potentially exposing taxpayers to large settlements.
Wyden sent a letter to Froman supporting the exemption of the tobacco industry, saying the industry has fought public health efforts around the world. “The Administration should not spend a dime of negotiating capital protecting tobacco companies,” Wyden wrote.
On Thursday, Froman reiterated his pledge that the accord would represent a balanced agreement with protections for workers and the environment.
“We’re focused on making sure we have an open, rules-based system with strong enforcement, raising standards for labor and environment,” he said at the mattress factory.
The TPP includes nations that account for a combined 40 percent of the world’s gross domestic product. Among them are Japan, Australia, Mexico and Canada. The pact would lower tariffs on beef, dairy products and automobiles, while setting up new regulatory provisions on pharmaceuticals, financial services and online commerce.
But it faces fierce opposition from liberal Democrats, as well as labor and environmental groups.
Although the Obama administration emerged victorious in its push for fast-track trade powers, the prospects of a final TPP accord coming to a congressional vote during the 2016 election season presents another daunting task. Some presidential candidates from both parties have denounced U.S. trade policies, saying they have contributed to the loss of manufacturing jobs, and all House members will be up for reelection.
“They are under a great amount of pressure,” said Ilana Solomon, the Sierra Club’s director of responsible trade, whose organization has concerns over sections of the TPP deal that govern environmental regulations. “They know that it’s not a shoo-in in Congress. Fast-track was incredibly difficult and they won on a thin majority. In an election season, if the policies do not make sense, representatives will not be happy, and that will put them in a bad space.”