Singapore urges US against tweaking TPP

MEXICO CITY — Any move by Congress to amend a massive Pacific trade pact — the centrepiece of US President Barack Obama’s rebalancing to Asia — would risk the deal collapsing, according to the Singapore Government.

“It’s in the interests of all 12 parties that once we agree on the agreement, that we should not go back and modify any part of it because that runs the risk of unravelling the entire agreement,” Minister for Trade and Industry Lim Hng Kiang said in an interview late last week in Mexico City.

The US-led Trans-Pacific Partnership, which does not include China, is yet to be ratified by the US and countries including Japan. Mr Lim said it was the clear position of US Trade Representative Michael Froman that the US is “not intending to renegotiate any aspect of the TPP”.

Still, passage of the agreement, which the World Bank estimates could raise gross domestic product by an average 1.1 per cent in member countries by 2030, is in doubt given the opposition of the two US presidential candidates, Mrs Hillary Clinton and Mr Donald Trump. That’s even as the Obama administration has prioritised economic and strategic ties with Asia as China’s clout in the region grows.

BIGGEST DEAL

Agreed to last October by Pacific-rim nations that make up about 40 per cent of the world’s economy, including Vietnam and Australia, the TPP would be the biggest US trade deal since the 1994 North American Free Trade Agreement, creating an economic alliance that will serve as a counterweight to China.

The pact goes beyond typical trade agreements that focus mostly on reducing tariffs by highlighting stricter safeguards for patents and levelling the playing field for companies that compete with government-backed businesses.

Opponents of the deal include companies like Ford Motor Co, which says it should include limits to a country’s ability to manipulate its currency, while US labour groups say it would safeguard corporate profits at the expense of workers. Some US lawmakers have called for it to be renegotiated.

Mr Lim said any move by Congress to modify the pact could be unacceptable for other countries that are yet to ratify it. In Japan, where legislation to ratify the TPP has been submitted to parliament, Prime Minister Shinzo Abe has made it clear that the deal will fall through if it is amended.

‘VARIOUS GROUPS’

The TPP is scheduled to come into force two months after it has been ratified by all member countries. It could also go into effect if the US, Japan and at least four other countries ratify it by October 2017.

“We’re in touch with our colleagues in the US (trade) section,” said Mr Lim. “The feedback given to us is that they are looking after the various groups who have given support during the passage of the fast-track authority stage and they are in regular engagement with the congressmen and the senators to address their concerns.”

TPP proponents say the best chance to get the pact through Congress will be the lame duck session after the November election, before the new congressional term begins in early January.

In a speech in Singapore this month, Republican John McCain, who chairs the Senate Armed Services Committee, said there was a possibility the TPP could be ratified then.

“What I do believe is that there is every possibility after this election that we could have a lame duck session Congress,” Mr McCain said. “Or, with the proper leadership of the next president of the United States who could marshal sufficient support.” BLOOMBERG