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World

U.S. Presidential Election Interferes With Ratification Of TPP

STEVE INSKEEP, HOST:

President Obama is traveling in East Asia, the region he would like to bind ever more closely to the United States, not least through a trade deal. It's the Trans-Pacific Partnership, an agreement that stands as one of his last big priorities.

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PRESIDENT BARACK OBAMA: I'm a strong supporter of TPP because it will reduce tariffs - taxes, basically - on American goods, from cars to crops, and make it easier for Americans to export into the fastest growing markets of the world.

INSKEEP: Here's the reality the president and other Pacific nations will face when they turn up at a series of big meetings over the next few days. That big trade deal is stuck in the U.S. Congress. In the presidential election campaign, both of Obama's would-be successors decided to oppose it.

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DONALD TRUMP: The TPP is a horrible deal. It is a deal that is going to lead to nothing but trouble.

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HILLARY CLINTON: I oppose it now. I'll oppose it after the election. And I'll oppose it as president.

INSKEEP: And the other signers of the deal, from Mexico to Japan to Malaysia, have certainly noticed. The agreement is not moving. Miriam Sapiro says the entire agreement, years in the making, has paused. She was involved in negotiating the deal as a top trade official in past years under Obama.

How are the other nations involved in this agreement doing it - ratifying it so far?

MIRIAM SAPIRO: They're scratching their heads. (Laughter) I think there's a great deal of concern - and the president will hear about this on his trip to Asia - that the U.S. does not look, at this point, as if it will be able to do it this year. Again, there is a chance. But at this point, nobody can make a prediction as to the likelihood that that will happen. Japan and other countries are ready to move forward. I think it's particularly important for Japan because they have made some tough economic choices based on the promise of the benefits of the TPP agreement for liberalizing their economy.

INSKEEP: So we're waiting on the possibility of a vote by Congress. There could be, conceivably, a vote after the election in the lame-duck session, before the new president takes office, if lawmakers chose to do so. Suppose they miss that. What happens then?

SAPIRO: Then, the incoming president takes office in January. She or he assembles their team. They'll be a look at a lot of issues, including what the new trade agenda should look like. Part of that discussion, presumably, will be what to do with TPP. And it's going to be a challenge because both candidates have come out strongly against the current agreement.

It's not clear if there will be any appetite for taking a fresh look at what could be improved. And even if the U.S. government decides that there are ways to try to address the problems that have been identified, it's quite unclear whether any of the TP partners would be willing to go along with such an effort.

INSKEEP: Would there have to be another renegotiation that might take years?

SAPIRO: That's certainly one scenario. And given the fact that there's likely to be little appetite among the other 11 countries to renegotiate this agreement, it will likely be on the backburner for a while.

INSKEEP: You know, if I might, Donald Trump has suggested he's going to create some appetite. He's going to pressure countries in ways they haven't been pressured - that everybody wants to do business with the United States and that he can make other countries pay his price. As someone who was involved in negotiating this deal, do you think there's leverage the United States hasn't used yet?

SAPIRO: I think that's a naive assumption because what people forget is we don't face a level playing field right now. The U.S. economy and market is much more open than those of foreign countries. So it actually disadvantages U.S. exporters when they face high tariffs or non-tariff barriers, like regulatory red tape, when they're trying to export more goods and services.

INSKEEP: Could we threaten to close the U.S. economy in some way or partially close the U.S. economy in some way?

SAPIRO: Yes, Steve, that idea has come up in the presidential campaign. And I and many others think that would be highly counterproductive because then we would be facing retaliatory tariffs.

INSKEEP: What happens if this deal dies - if it doesn't get ratified in the end? What is the effect on the United States and the world?

SAPIRO: I think the impact would be a blow to our credibility and make it harder for us to assert a strong economic presence in Asia. I don't think it's going to change our strategic orientation or our commitment to our friends and allies there in any way. But I think they will worry that we were not able to follow through.

INSKEEP: Miriam Sapiro, thanks very much.

SAPIRO: My pleasure, Steve.

INSKEEP: She was the acting U.S. trade representative in 2013 while the Trans-Pacific Partnership was being negotiated. Transcript provided by NPR, Copyright NPR.