Obama Trade Agenda Fails in House of Representatives

President Obama’s 11th-hour trip to the U.S. Capitol to meet with Democratic lawmakers today to salvage his trade agenda has been unsuccessful. His rare appearance this morning failed to garner enough support for trade promotion authority, leaving the his second-term hallmark trade package stymied in the House of Representatives.

The House failed to advance the entire trade package, though it did pass a few elements of the bill. Representatives passed trade-promotion authority in a 219 to 211 vote and passed a customs bill in a 240 to 190 vote. The critically important aspect of Obama’s trade agenda, and the most controversial, was the trade promotion powers, which allows the president to negotiate trade deals and present to Congress for an up or down vote.

In a 126 to 302 vote, the House it failed to pass trade adjustment assistance. Because this part of the bill is connected to the other two, the overall bill could not advance to the White House for Obama to sign into law. The assistance bill gives American workers support if they are negatively impacted by any trade deals.

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In a dramatic move to help keep the legislation on the table, Speaker of the House John Boehner made a motion to have adjustment adjustment assistance be voted on a second time. The second vote hasn’t taken place yet, but is expected in the early part of next week.

Insiders expect a major fight on the second vote for trade adjustment assistance. Now that Democrats know the trade-promotion part of the bill has passed, they know they can entirely block the trade package by voting down the assistance act again. On the other hand, it is a piece of the package that the party has supported in the past and was a key compromise in the recent Senate version of the legislation.

The biggest challenge will be convincing enough Democrats to change their votes, especially after House Minority Leader Nancy Pelosi split from the President and led the moves against the Assistance Act. Estimates are over 100 Democrats will have to switch for the failed package to move ahead.

“I think today we have an opportunity to slow down the [trade deal,]” said Pelosi. “Whatever the deal is with other countries, we want a better deal for American workers.”

In a final effort to rally support, Paul Ryan, who also chairs the House Ways & Means committee and has been shepherding the bill, called the bill a jobs issue and an economic one that will impact the U.S.’s future well down the road.  “The rule book on how the global economy works is being written right now. The only way to be in the game is through trade agreements. That is how America can lead,” said Ryan.

Until next week’s vote, the defection by Democrats today has industry watchers and those watching the ongoing trade negotiations frustrated and concerned about the progress of the Trans-Pacific Partnership.

“This is certainly going to make it much more difficult [to get the trade agreements] finalized,” said Juanita Duggan, president of the American Apparel and Footwear Association. “It’s a stunning defeat for the president and an embarrassment for the U.S. and the countries in negotiations probably won’t put best offers on the table now. For that reason, our own leadership knows this has to be resolved and they will go back to the drawing board.”

“My initial reaction is we are a little discouraged because we had the opportunity to send the trade promotion authority bill to the president’s desk today and now we’re delayed. I was encouraged we finally have a strong [trade promotion] vote on the record,” said Matt Priest president of the Footwear Retailers and Distributors of America.

Big brands from Gap Inc. to Nike Inc. have made high-profile efforts to promote Obama’s trade promotion authority and the overall Trans-Pacific deal. The TPP, with 11 member nations, is wrapping up after five years of talks and would help lower duties and regulate trade with Asia-Pacific nations. It is seen as an important counter to China’s influence in the region.

“The lack of TPA in a negotiation is something that will always be used by our trade partners to say they’re not giving us the best offer because they don’t see [Obama] as having the authority to pull it off amongst [our] government,” said Priest. “This isn’t fun and games for folks on the House floor; this impacts the five or six year trade negotiation outcome that will ultimately impact the jobs that are created and savings that are passed on to American consumers.”

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