Apparel Sourcing Intelligence - Worldwide

AGOA renewal threatened by US Senate block on discussing TPP “Fast track”

Though possibly temporary, the May 12 US Senate rejection of a proposal to speed up approval of the Trans-Pacific Partnership (TPP) also imperilled progress on other key trade issues – such as renewing of the AGOA programme, which expires on September 30. By late May 13, Senate deals seemed to offer greater likelihood of progress. 

With every US Democrat Senator but one voting not to discuss a Bill allowing Trade Promotion Authority (TPA) for major international treaties like the TPP, the Bill had insufficient supporters for discussion.

The Bill’s future is now uncertain, though White House officials described the vote as “a procedural snafu” (American for a minor mess) and were trying to imply the Bill might be introduced later. Later on May 13, deals began to emerge that might mean the Bill, and the other measures, being introduced during the following week.

The Senate vote was caused by disagreements between Republicans and Democrats over  how other trade measures should be treated. These include the (widely agreed)  renewal of the AGOA programme for duty-free imports of products made in Africa, more controversial proposals for penalising other countries’ alleged currency manipulations and helping Americans losing out to foreign trade, and the renewal of expired import duty reductions for many products (though virtually no apparel or textile products) imported from developing countries.

The vote probably at least delays further progress on the TPP, though one Japanese government official told Reuters on May 12 that it would be hard for TPP countries to close a deal on the trade pact unless the United States enacts the fast-track legislation the Senate refused to discuss.  Nonetheless Koji Tsuruoka, Japan’s chief TPP negotiator, said that there is no change to the goal of holding ministerial level talks from May 26-28 in the Philippines.

But with the EU admitting two weeks earlier that it expected negotiations on the proposed EU-US Transatlantic Trade and Investment Partnership (TTIP) to continue at least into 2016, it now looks unlikely TTIP negotiations will be concluded under Barack Obama’s Presidency.