The Trans-Pacific Partnership just hit a hurdle in the U.S. Senate.
Tuesday, the Senate blocked the Trade Promotion Authority (TPA) bill, which would have given President Obama the power to negotiate trade agreements and have them sent to Congress for a vote, without the option for amendments.
The fast-track trade bill was blocked at 52-45 votes. At least 60 were needed to pass a procedural vote to advance.
It was a bit of a blow to the ongoing negotiations for the Trans-Pacific Partnership, which would help eliminate or reduce footwear tariffs from several nations, most importantly Vietnam. The 11 other countries in the partnership, in addition to the U.S., are wrapping up five years of intense negotiations and meeting again at the end of the week in Guam.
“I think the broader concern about was about where the Democrats were [on the bill] and what’s coming up in the House,” said Matt Priest, president of the FDRA. “I don’t want to underestimate or overestimate the vote, but it’s definitely headed for more discussion.”
Priest said he thought it was unlikely that legislators would try to move the bill through the House.
Besides being a major roadblock for the Trans-Pacific Partnership, the vote was also a major loss for President Obama, who faced some of his most vocal opposition from within his own party.
While this is not expected to be the last of Promotion Authority legislation, the loss does mean that Republican leader Mitch McConnell will need to regroup with the GOP. Democrats, too, will likely be hearing from President Obama in the coming days as negotiations continue.
Earlier in the day, Majority Leader McConnell agreed to one of the terms set forth by Minority Leader Harry Reid, called the Trade Adjustment Assistance, giving aid to workers impacted by the trade deal. While the TAA is largely unpopular within Republican ranks, it was an agreed-upon compromise to get Promotion Authority passed.
Two other bills Reid asked to be lumped in with the fast-track bill — customs legislation aimed at curbing currency manipulation and protecting worker rights, and a deal extending a trade program with sub-Saharan Africa — were not a part of the compromise.
The issue of the currency manipulation seems to be a major sticking point for both parties, where the democrats are insisting on the inclusion in the Promotion Authority bill, but Republicans are concerned if that would spur a presidential veto.
“We haven’t had a real trade policy debate in this chamber since at least 2002,” said Senator Orrin Hatch, one of the bill’s sponsors on the floor of the Senate. “That’s 13 years ago. Think about that. We need to be actively working to break down barriers for American exports. This is how we can grow our economy and create good, high-paying jobs for American workers.”
Liberal Democrats, including Senator Barbara Boxer and Senator Bernie Sanders, spoke against the bill this morning, with Sanders singling out President Obama’s trip to Nike last Friday.
Sanders called the trip “disappointing” and argued that Nike’s expansion overseas has benefited only the top CEOs of that company while leaving workers with little income to show for their work. “While Mr. Knight’s net worth has more than tripled since 1999, the average Vietnamese worker who makes Nike shoes earns pennies an hour. That is pretty much synonymous with what unfettered free trade is all about: a handful of people like Phil Knight become multi, multibillionaires and poor people all over the world are exploited,” Sanders said.
The Senate block also sends a strong message to other TPP member countries ahead of the next round of negotiations for the deal in Guam starting Friday.
“We’re hoping for so positive movement in the next couple days to show there is still momentum before the talks resume,” said Priest. “But it’s always a balancing act with domestic politics and your trading partners.”