Certification is a legally binding obligation on the US President. The President withholds formal written notification to another party to a trade agreement that the US has satisfied its domestic approval processes until the US certifies the other party has altered that party’s domestic laws and policies to satisfy US expectations of what is needed to comply with the TPPA.
The US officials transmit a list of the changes to the other country’s domestic laws and policies that the US government requires before it will allow the pact to go into force. US government officials then monitor compliance, and pressure the government of the trade partner country to alter its laws and policies until they satisfy the US view of the changes required.
Even if the US Congress passed the Trans-Pacific Partnership Agreement (TPPA), the pact would only go into effect in relation to each party when the US certified that party had satisfied US notions of compliance.Certification therefore provides additional leverage to the US Congress and US industry to impose its interpretation on a party’s obligations under the TPPA.
While the certification requirement has existed since the 1980s, there has been a lot more focus in recent years on securing the changes demanded by the US corporations prior to certification. That has caused longer delays before agreements come into force with the US.
Certification will apply to the TPPA. The Bipartisan Trade Priorities Act of 2014 (also known as the Camp-Baucus bill), which was introduced in January 2014 to establish a new grant of Fast Track authority for the TPPA has new and additional requirements for the USTR to consult with Congress about whether certification requirements have been met.
The process applies to a broad range of measures, including laws, regulations, institutional and regulatory arrangements, adoption of international treaties, and executive decrees. The US insists that its interpretation of such provisions and terminology must prevail, even where ambiguity or vagueness was deliberate.
The US has required other parties to comply with what it believes was agreed, even if it is not written in the text.It does not seem that the US needs to produce any corroborating evidence to support its professed expectations or claims that there were additional oral agreements and commitments that extend beyond the FTA texts.
This US practice would be especially problematic for countries that joined the TPPA part way through the negotiations and were required to accept everything that had been agreed to date. They will not know what discussion has taken place regarding the meaning of the provisions that had already agreed to.
A party that joined the TPPA talks part way through should expect discussions during the accession process to become part of the conditions for certification.Parallel negotiations between the US and another TPPA country may also be included in certification.
The USTR has even tried to obtain concessions through certification that unquestionably were not included in the trade pact and to which the USTR alleged no verbal commitment.
The US would be likely to certify compliance at different times for different TPPA countries, depending on their willingness to accede to US demands. That would create practical flow-on problems for cumulation and rules of origin.
The other country could reject the US position, and its legislature could refuse to pass the law that the US requires, but exercising its sovereignty would come at a price. If the US refuses to certify compliance in a bilateral FTA, the other country would be unable to enjoy any benefits it secured from the US, such as lower tariffs.
If the agreement comes into force between parties other than the US, all those countries will need to comply with the generic rules. The US could deny the most prized market access opportunities on offer in the TPPA, while countries would still be required to change their domestic laws and policies when the TPPA came into effect as between the non-US parties. Most of those laws and policies will become generally applicable to all countries – the new law of the land – so the US would de facto get the benefits, without making any concessions.
The fallout from the certification process is treated as a domestic political issue that the government is left to manage.
Certification can extend for years after each country has fulfilled its constitutional requirements for ratification. Indeed, the construct of the certification obligation in legislation implementing US FTAs contemplates the prospect that enactment of a pact could be withheld indefinitely.
There are numerous examples of US officials becoming involved in drafting the other party’s laws to ensure they will meet US requirements for certification.
US corporate interests drive US government demands during the certification process, in addition to the particulars of the U.S. legislation to approve any FTA.
Certification is an additional requirement, separate from Fast Track. Under the Fast Track process Congress grants the US President authority to negotiate, sign and enter into an agreement before Congress votes on it. Fast Track forbids any amendments, and also limits the hours of congressional debate, so as to ensure its speedy passage of the pact.
A majority of members of Congress could insist on changes to the TPPA, even with Fast Track.
If a TPPA is signed without the inclusion of rules on so-called currency manipulation, for example, it is likely that the US would make additional demands to add such terms post-signing, saying they could not get the signed deal through Congress without additional concessions.
President Obama does not currently have Fast Track. Without Fast Track, normal congressional voting procedures apply. House and Senate committees could propose an amendment to the TPPA’s implementing legislation, making enactment of the pact conditional on additional features being included in the text or US concessions being removed. Or they might simply refuse to approve aspects of the signed pact, which would mean that it would not have force of law with respect to the United States.
Want more info? Read the full memorandum here.
#Professor Jane Kelsey, Faculty of Law, The University of Auckland, New Zealand and Sanya Reid Smith, Legal Adviser and Senior Researcher, Third World Network, August 2014