Even as both people vying to be his successor oppose it, President Obama is preparing a final push in Congress to get the Trans-Pacific Partnership trade deal, or TPP, ratified by year’s end.
On Monday, lawyers — possible beneficiaries of such a deal — expressed doubts his efforts will be successful.
Scott Lincicome, who’s of counsel at White & Case and lectures on international trade at Duke University, put the chances of the bill passing this fall at “well under 50 percent.”
“We continue to believe that the chances of a lame duck consideration are slim,” Lincicome said. “You have a vigorously anti-TPP and anti-trade candidate in Donald Trump, and you have a candidate in Hillary Clinton, who maybe deep down likes the TPP, but was pushed far to her left by Bernie Sanders.”
More than seven years in the making, the agreement involves 12 countries, including the U.S., Canada, Mexico, Japan, Malaysia, and Vietnam, and is one of the largest trade deals ever, affecting an estimated 40 percent of the world’s GDP . It still needs to be approved by Congress before the U.S. officially becomes a party.
Clinton and Trump aside, the deal has long been controversial. Proponents say TPP would boost growth and counter China’s economic heft in the region. Opponents say it gives too much power to multinational corporations and would result in more American jobs being shipped overseas.
With dozens of chapters governing a wide range of legal areas from intellectual property to the environment, and the potential to boost M&A activity by liberalizing regulations in signatory countries, the deal has had some law firms gearing up for work.
In June, Jones Day announced the creation of a TPP task force and launched a blog titled, simply, TPPTreaty.com .
“When the TPA was passed last summer, the thinking was, ‘Oh this is a sure thing,’” said Laura Fraedrich, who serves on the task force.
[A note on the alphabet soup: TPA is short for “Trade Promotion Authority,” also known as “fast track,” a precursor bill that allows the President to submit TPP for an up-or-down vote in Congress.]
Asked where the TPP would affect the most legal change, Fraedrich said, “The number one thing is from a trade perspective: it’s going to have a lot of influence over where people invest and manufacture, and how people do supply chain sourcing.”
Fraedrich also highlighted increased protections for intellectual property, especially in the area of pharmaceuticals, and new rules relating to government procurement.
A number of law firms have published blog posts and papers on the deal, but until TPP is actually ratified, the legal changes are theoretical. Interest in the deal has waned as the political tide has turned against it, Fraedrich said.
“I think the people that are going to be really serious about it are already positioned,” she said. “There was a little more focus on it right after it was signed, but now, with both candidates saying they’re against it, people aren’t talking about it as much anymore.”
An internet search turns up a lot of law firm postings on TPP from when the deal was first announced last November, and from earlier this year, but relatively few in recent months.
Aside from Jones Day, White & Case has also published a lengthy document on the deal, authored by Lincicome and Brian Picone, a trade analyst with the firm.
Lincicome was careful to note he’d already turned bearish on the likelihood of the deal’s passage back May: “It is also increasingly unlikely that the TPP will be considered between the presidential elections and the start of 2017,” he wrote, adding that the fate of the deal under a new president will be “highly uncertain.”
Lincicome declined to comment on how the deal’s ebbing fortunes have affected the offering of legal services.
When Dentons announced tie-ups with several Asia Pacific law firms last November, the firm cited TPP as a reason to be optimistic about growth in the region. The firm declined to comment for this story.
Although both candidates oppose the deal, Clinton has supported it in the past, and her opposition has been more lukewarm than that of Trump, who’s called the deal “a rape of our country.”
Some have suggested that, if elected, Clinton may push to renegotiate the deal in a way that makes it more politically palatable. Whether that would actually be possible for her is “the 50,000 dollar question,” Lincicome said.
“I don’t think there’s any likelihood of that happening,” Fraedrich said.
According to a Sunday report in the New York Times, the President is set to begin his push for ratification in September, with a potential vote not coming until after the election in early November.
“There is one other caveat,” Lincicome said, explaining that a Clinton landslide which results in Democrats retaking both houses of Congress would be a game changer.
“If we see a total realignment of Congress, then I think the odds of lame duck consideration could go up significantly,” he said.
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