Delays in finalizing U.S. legislation to speed free trade deals through Congress are casting a cloud over a 12-nation trade pact many thought was near completion, officials close to the negotiations said.
In conversations with Reuters, officials from six countries in the Trans-Pacific Partnership said the lack of clarity over the conditions Congress would impose on U.S. negotiators was a stumbling block for the talks, frustrating some of the U.S.'s major trading partners.
Canada and Japan are insisting on trade promotion authority (TPA) legislation, which allows lawmakers to set objectives for trade deals in exchange for a yes-or-no vote, before closing the deal, said a source from one of America's negotiating partners who has direct knowledge of the talks.
"You don't want to do a deal and then the next day they tell you that what was agreed is not enough," the source said, declining to be named because of the sensitivity of the matter.
Senate Committee on Finance Chairman Orrin Hatch, a Republican, and the panel's top Democrat, Ron Wyden, are at odds over Wyden's push for Congress to have a greater role in deciding whether final deals pass muster, which may help win over trade-skeptical Democrats.
Hatch said on Monday an agreement with Wyden was unlikely until after Congress returns from a two-week break in mid-April, and Senate Majority Leader Mitch McConnell said he hopes a bill can move quickly then.
Once a bill is introduced, other lawmakers have their own pet issues and trading partners fear a long process of amendment and counter-amendment to a bill which Hatch had hoped to present in February.
"Everyone is now drawing up their lists and they'll say 'I'm giving you TPA, but you have to respect all these criteria'," a trade official from another non-U.S. nation said.
"If we start (the process of getting TPA) state by state, and a congressman is asking for this and that, do you know how many trade-offs there would be?"
New Zealand Trade Minister Tim Groser, who visited Washington last week, said he did not know whether the lack of TPA was a genuine argument or a "facade." Still, the only way to remove the hurdle was to pass TPA, he said.
A source familiar with Japan's stance said given the current situation, it was unclear whether Japan and the United States could reach a side deal on farm and auto exports, another stumbling block to finishing the wider deal, before Abe's visit.
"It is too far-fetched to say a deal is almost done. I'd not say we are very far apart, but I'd say there are still very serious issues pending that require a solution, which I don't see," the source said.
The first official said TPP members were working towards a ministerial meeting on the sidelines of an Asia-Pacific Economic Cooperation trade ministers' meeting in the Philippines on May 23-24. That could be an opportunity to close the deal.
Apart from the TPA and the Japan-U.S. agreement, "I would say we are very close, we are really close," the official said.