Trans-Pacific Partnership may not be dead yet

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Trans-Pacific Partnership may not be dead yet

One sign Trump's position may morph: The involvement of an ex-Chamber of Commerce lobbyist.

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Trans-Pacific Partnership may not be dead yet

Cyrus Sanati, Special for USA Today 11:51 a.m. EST November 20, 2016
AP TRUMP FINANCIAL REGULATION A ELN FILE USA MI

Donald Trump speaks in Grand Rapids on Nov. 8, 2016.(Photo: Paul Sancya, AP)

It may be too early to write off the Trans-Pacific Partnership, or TPP.

While the tech-friendly free trade agreement won’t come up for a vote during the current lame-duck session of Congress, that doesn’t mean it won’t be resurrected in some form under President-elect Donald Trump. In the past two weeks, Trump has walked back from some of his more radical and impractical campaign promises, giving hope to some in Silicon Valley that he’d do the same with his anti-trade rhetoric.

Trump denounced the TPP as a “disaster” being “pushed by special interests who want to rape our country.” Yet he appears to have included Rolf Lundberg Jr., a former lobbyist from the TPP-friendly U.S. Chamber of Commerce, to head up “trade reform” on his presidential transition team, according to an organization chart obtained by The New York Times.

Trump's transition team has been notoriously fluid. Its new executive director was recently removing lobbyists from the team, so if Lundberg had a place on it, he may not any longer. But if he or the Chamber have any say in Trump's trade policy, you may see a softer stance than heard on the campaign trail.

The U.S. Chamber of Commerce is one of the most powerful lobbying groups in the country, representing American business interests around the globe. It's a huge advocate for free trade, including the TPP. In a sign of its influence, the Chamber led the lobbying effort that pressured Republicans into giving President Obama fast track trade negotiating authority over the TPP. This not only gave the White House carte blanche to hammer out a deal on its own, but also barred Congress from making any changes to it.

Lundberg, who now runs a lobbying group focused on the travel and hospitality industry, managed the Chamber’s political program from 2001 to 2013, where he oversaw candidate endorsements, as well as the Chamber’s all-powerful political action committee.

Some of that lobbying included the TPP, public filings indicate. As far back as 2009 and until 2013, Lundberg’s name appears on several of the Chamber’s quarterly lobbying disclosure forms in sections that list TPP as a topic lobbyists raised with lawmakers. Blair Latoff Holmes, a spokesperson for the Chamber, confirmed that in 2013 the lobbying group was advocating “US and foreign negotiators for specific provisions to be included in the TPP,” but that Lundberg “was not involved in that effort.” The Chamber wouldn't comment on whether Lundberg lobbied Congress on behalf of the TPP from 2009 to 2012.

Lundberg declined to comment on reports he was involved in the Trump transition team. The Trump transition team did not return requests for comment.

Lundberg’s history doesn’t necessarily mean that he’ll be championing the free trade agreement if he’s on board with the new Trump administration. His personal views may have changed. But it does raise questions as to Trump’s commitment to “draining the swamp” and killing the TPP. With Trump now saying that his “huge” border wall might now be just a simple fence in some areas and that Obamacare might not be totally repealed as promised, there’s a chance he will also be malleable on his negative views on trade and the TPP.

TPP is good for cloud providers

Silicon Valley is a big fan of TPP as it is one of the first free trade agreements to specifically address the changing realities of the new digital economy. One key provision ends the practice of using server localization barriers to inhibit the transfer of data across borders. This currently prevents non-U.S. companies, especially in Canada, from using U.S.-based cloud service providers like Google, Amazon and Microsoft to offload their computing power off premise. The TPP would bring more business to these U.S. companies.

The current system alsomakes it expensive for U.S startups to expand abroad, as many countries require that they set up an office and a data center in that country. TPP allows them to use their own servers or the big US-based cloud providers to run their apps and programs, thus eliminating the need to set up a local office. This rule change could potentially be a big win for companies that sell software-as-a-service, or SaaS, products, like Salesforce and Workday, as their software doesn’t live locally on a user’s computer, but is instead accessed through the web and centrally hosted (mostly in the US). The free flow of data will allow companies abroad to now cut costs and boost efficiency, creating a positive return for both parties.

Telecommunication firms, like Verizon, Sprint and AT&T, which offer voice and data services in many TPP countries already, will benefit from new rules that bar preferential treatment of local carriers, especially in Vietnam, where the local carrier is state-owned.

Electronic retailers like Amazon and Ebay should flourish under TPP as well, as the agreement sets up a legal framework to facilitate electronic payments and protect personal information exchanged online between customers and merchants. TPP also gets rid of all customs duties for digital products and protects them with strict new copyright rules. This should make many US-made digital products, like video games and apps, cheaper to download, boosting sales while also making it less lucrative and more punitive to buy and sell pirated copies.

That potential new business means jobs to Americans.

The US economy has simply advanced beyond exporting goods made on an assembly line, sewn in a sweatshop or hacked off in a mine. Today, four out of five Americans work in the service sector, so that is where the US should be focusing its export efforts to achieve maximum job growth through trade. Service exports includes everything from consulting, travel and information technology (IT) services to patent and royalty payments.

The US is by far the world’s largest exporter of services, making it in some ways the Saudi Arabia of brainpower. US service exports totaled a record $751 billion in 2015, creating a trade surplus in services of around $262 billion, according to the US Bureau of Economic Analysis.

TPP can help him achieve the 4% per annum GDP growth he promised to deliver on the campaign trail. TPP helps address many of the problems that US service providers bump up against when trying to expand abroad and helps facilitate the free-flow of data.

Lundberg is clearly well versed on the TPP and its benefits from his work at the Chamber when he was lobbying Congress. It may not be a bad idea for Trump to sit down with him and learn about how free trade and fair trade can exist at the same time.

Cyrus Sanati is a financial and business columnist who has written for The New York Times, Fortune and BreakingViews. You can follow him at @beyondblunt.

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