The top lawmakers on the House and Senate’s tax-writing committees struck a deal Thursday on a measure that would grease the wheels for President Barack Obama to lock in one of the biggest trade deals in history.
The bill would hand the President authority to fast-track trade deals like the 12-country Trans-Pacific Partnership through Congress without amendments. It’s key to convincing foreign leaders they can make the concessions necessary to close the negotiations without lawmakers trying to re-open them months later.
It’s known as “trade promotion authority,” and sponsored by House Ways and Means Chairman Paul Ryan, R-Wisconsin, Senate Finance Chairman Orrin Hatch, R-Utah, and that panel’s top Democrat, Ron Wyden of Oregon, who resisted intense liberal pressure to oppose the bill.
Their move sets the stage for debate over the massive Asia-Pacific pact that could become central to Obama’s legacy – and unfurl an unwieldy set of policy questions that 2016 contenders for the White House will have to grapple with on the campaign trail.
But it’s also forced Obama into a bitter battle with Democrats on Capitol Hill as well as many of his traditional allies – particularly labor unions and environmental groups.
The biggest champions of Obama’s cause are House and Senate Republican leaders, as well as the business lobby and top executives for pharmaceutical drug makers, clothing retailers, food importers, heavy machinery manufacturers and more.
Obama endorsed the bill in a statement, saying it would help the United States – rather than China – set the course of global trade and economic policies. He also offered assurances intended to quell the left’s discontent.
“My top priority in any trade negotiation is expanding opportunity for hardworking Americans. It’s no secret that past trade deals haven’t always lived up to their promise, and that’s why I will only sign my name to an agreement that helps ordinary Americans get ahead,” Obama said.
“The bill put forward today would help us write those rules in a way that avoids the mistakes from our past, seizes opportunities for our future and stays true to our values,” he said. “It would level the playing field, give our workers a fair shot, and for the first time, include strong fully enforceable protections for workers’ rights, the environment, and a free and open Internet.”
The Senate Finance Committee could hold its first hearing on the trade bill as early as next week, and Senate Majority Leader Mitch McConnell, R-Kentucky, said Thursday he wants to bring the bill to the Senate floor for a vote in the “very near future.”
“The trade promotion authority legislation introduced today represents a real step forward on policy that has enjoyed long-standing bipartisan support, and will help expand markets for American goods and services,” McConnell said.
Trade promotion authority has been handed at points to every president since Richard Nixon. Bill Clinton used it to pass the North American Free Trade Agreement, and deals with South Korea, Colombia and Panama were green-lighted early in Obama’s presidency under authority that had been originally given to George W. Bush.
The Trans-Pacific Partnership is the first deal that could advance under the authority, since negotiators have said they’re close to finalizing the pact, which includes all of North America, Australia, Japan – which is the real pearl of the deal in U.S. businesses’ eyes – and a handful of other Asia-Pacific countries.
But another one, which would smooth out regulatory differences in areas like vehicle safety rules and chemical inspections between the United States and the European Union, could follow it.
Trade promotion authority gives Congress some leverage, too: It allows lawmakers to set goals for U.S. Trade Representative Michael Froman’s negotiating team to hit – and if those goals aren’t met, the fast-tracking authority is revoked.
The key question is whether Democrats – who will be joined by small numbers of tea party populists who are resistant to handing any more authority to a president they distrust – can muster enough votes to stop the bill from going forward.
Wyden insisted there are plenty of protections in the bill for Democrats to get on board with it.
“I’m proud this bipartisan bill creates what I expect to be unprecedented transparency in trade negotiations, and ensures future trade deals break new ground to promote human rights, improve labor conditions, and safeguard the environment,” he said in a statement. “At the core of this agreement is a new mandate for the open internet, free speech and digital commerce, by ensuring information can flow freely across national borders over the Internet.”
The U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers have led the lobbying effort for trade promotion authority.
A host of business leaders were lauding the bill’s introduction on Thursday.
“The passage of trade promotion authority legislation is critical to increasing the competitiveness of U.S. companies overseas and to ensuring continued job growth at home,” said Telecommunications Industry Association chief executive officer Scott Belcher. “TPA is particularly important for maintaining our country’s international leadership in the highly competitive information and communications industry.
Leading the opposition on the left has been Massachusetts Sen. Elizabeth Warren, who’s lambasted the deal’s inclusion of a typical trade-deal mechanism that allows companies to challenge countries’ laws and policies with an international arbiter, and the AFL-CIO, which has cut off donations to Democratic candidates to gird for the trade battle.
Liberals have fretted that the bill will open the door to increased dealings with Southeast Asian countries like Vietnam with much weaker labor rules and environmental restrictions than the United States has in place.
Doctors Without Borders has complained that the deal’s intellectual property provisions will make it harder for poor countries to manufacture generic drugs – cutting off access to medicines to boost U.S. pharmaceutical drug-makers’ bottom lines.
Liberal groups said Thursday the bill includes nowhere near the protections they sought.
“At a time when workers all over the country are standing up for higher wages, Congress is considering legislation that will speed through corporate-driven trade deals,” AFL-CIO President Richard Trumka said. “For decades, we’ve seen how fast-tracked trade deals devastated our communities through lost jobs and eroded public services. We can’t afford another bad deal that lowers wages and outsources jobs.”
Sierra Club executive director Michael Brune called the bill “toxic for Congress and for our air, water and climate.”
“We’ve seen this all before,” he said. “This bill replicates an old, failed model of trade authority that rushes deals through Congress and strips out the vital protections and oversight that ensure trade pacts benefit American communities, workers, and the environment.”