White House may have to renegotiate on TPP, senator says

Washington | Reuters –– A key U.S. senator said on Friday the Obama administration may have to renegotiate parts of a Pacific trade pact, heralding a tough battle to win support in Congress.

The administration notified lawmakers Thursday it plans to sign the 12-nation Trans-Pacific Partnership, starting a countdown to a congressional vote that could come in the middle of next year’s election campaign.

But U.S. Senate finance committee chairman Orrin Hatch, a Republican whose support will be crucial to passing the deal, said that although he reserved judgment on the fine print, negotiators might have to go back to the table.

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“I understand that renegotiation may be difficult, particularly with so many parties involved,” he said in a speech at the U.S. Chamber of Commerce, which also has yet to give a verdict on the pact.

“But at the end of the day, the alternative to renegotiation may very well be no TPP at all.”

Some of President Barack Obama’s Democrats have also suggested renegotiating the deal, which must be ratified by Congress and win approval from the other 11 parties to the pact before it takes effect.

Hatch said failing to secure 12 years’ protection for next-generation biological drugs could make it hard for innovators to recoup investment in new products, drive companies out of the industry and leave U.S. consumers subsidizing cheaper medicines in other countries.

The TPP sets a minimum of five years with an extra buffer for administrative processes. Hatch said Australia had been “greedy” in leading resistance to the longer monopoly period but the U.S. administration should never have agreed to it.

While Hatch said he would carefully study the text, released Thursday, he saw problems with provisions on tobacco, labour rules and dairy.

“We’re losing votes as we speak for no good reason,” he told reporters. “My suggestion is, get back to the bargaining table and let them know that this may not pass.”

U.S. Trade Representative Michael Froman has warned against re-opening the complex deal, as Washington has done with past trade agreements, saying any attempt to fix one section might unravel the whole pact.

But Hatch said it would be difficult to take up the TPP during an election year anyway, even in the end-year period between the election and swearing in the new Congress.

“A lot of people on something this important do not want to have it passed or rejected by a lame-duck Congress,” he said.

Reporting for Reuters by Krista Hughes in Washington, D.C.

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