The extension will give US President Barak Obama and TPA supporters more time to seek solutions to salvage the Trade Promotion Authority bill. But chances for President Obama to gain TPA and complete the TPP remain fragile because it has been strongly opposed with 302 no votes and 26 yes ones. Ironically Democrats are the ones who oppose it.

Fate of TPA

The Trade Adjustment Assistance program is part of the Trade Promotion Authority package which was drafted to help US laborers who might lose their jobs due to the Trans-Pacific Partnership agreement. So far, TPP negotiations have almost been completed but trade partners want Obama to gain TPA before finally signing the deal. If approved, Obama will have fast track authority that leads to a simple yes-or-no vote on trade deals. The bill is an essential condition for President Obama to complete TPP negotiations with 11 countries to establish a free trade area which will account for 30% of the world trade value and 40% of the world economic outputs.

But the TAA program was rejected at a vote in the US House despite President Obama’s lobbying efforts. While most Republicans support the TPP the Democrats are worried that it will only bring benefit to multi-national companies and American workers will lose their jobs because American companies are likely to hire cheap labors overseas. The Democrats also opposed President Obama’s proposal to extract 700 million USD from the 2.6 billion USD worth of health insurance for the elderly to support the TAA program. Minority leader at the House Nancy Pelosi said she opposed the TAA program to prevent fast-track authority. She urged Democrats and Republicans to jointly draft a new trade bill to better protect American laborers and the environment.

Laborers’ interests play a key role

Failing to gain TPA at the House, President Obama will have to face more difficulties before his second term ends in 18 months. The failure also reveals a serious split within the Democratic Party. The Democrats want to protect American laborers due to their close bonds with American trade unions and that they want to be re-elected in the coming term. A Democratic lawmaker said President Obama’s term will end in 18 months but trade unions which have supported the Democratic Party over the past several years will continue working. Strong opposition from trade unions will pose a threat against the re-election of any Democratic lawmaker that supports the TPP.

Failing to achieve fast-track authority will make it more difficult for President Obama to complete TPP negotiations which have already been behind schedule. TPA plays a crucial role in the TPP negotiation process which has been very complicated. In late May, a Ministerial Meeting on the TPP was canceled because Japan and Chile failed to complete their TPP negotiations. The Japanese government stated that it will hardly make necessary political concessions for the signing of the TPP if the US Congress has the authority to make final changes in trade deals.

TPP faces numerous difficulties.

Though the TAA program failed, opportunities for the TPA continue until July 30 and President Obama will have more time to persuade other Democrats. The TPP Agreement is expected to become Obama’s economic legacy, but TPP negotiations are likely to continue with numerous difficulties.