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American Shipper

Senate debates giving president more power to close trade deals

Critics are trying to put brakes on Trade Promotion Authority, while the Obama administration is actively pursuing Pacific Rim and European agreements it says will reduce tariffs and other barriers to U.S. goods in partner nations.

   The U.S. Commerce Department on Tuesday honored 45 companies for excellence in expanding exports and helping the U.S. economy, but juxtaposed against that celebration of export benefits was the uphill battle to convince Democratic members of Congress to grant the president more power to negotiate trade deals without Congress trying to change them.
   The Obama administration is actively pursuing free trade agreements with Pacific Rim and European countries that it says will reduce tariffs and other barriers to U.S. goods in partner nations. But progressives say the deals are likely to result in further outsourcing of jobs to countries with cheap labor.
   The Senate last Thursday voted to open debate on Trade Promotion Authority, but only after leaders agreed to allow amendments related to worker protections, job-displacement assistance, and enforcement of currency manipulation by certain countries. TPA provides the framework for President Obama’s team to negotiate the Trans-Pacific Partnership agreement.
   Capitol Hill observers say it will be a close vote in the Senate, but even if TPA advances, the chances the bill passes in the House remains very much an open question. House Democrats are adamantly opposed to TPA and at least 20 Democrats will need to join Republicans to get the bill through. One faction of the Republican Party is against giving more power to a president they believe has repeatedly abused executive authority to get around congressional intent on several issues.
   On Tuesday, amendments to TPA were introduced that sought to prevent any trade deal that didn’t address human trafficking and dispute settlement procedures.
   Sen. Robert Menendez, D-N.J., and TPA supporter Ron Wyden, D-Ore., proposed an amendment that would prohibit expedited consideration of trade agreements with countries ranked by the State Department as having poor human trafficking records. The provision is primarily directed at Malaysia, which is on the lowest tier for allegedly allowing workers to be lured from poorer countries and prohibiting them from leaving until their contract is finished. The Secretary of State can seek a waiver from the law if he can certify that the country has taken concrete steps to change the treatment of foreign workers.
   “This is an historic change to the nature of trade agreements now and in the future. For the first time, we have trade promotion authority that says we cannot provide fast track for a trade deal with countries that have done nothing to stem the tide of human trafficking. For the first time, we have an amendment in a major bill that would impose real consequences – real repercussions – for turning a blind-eye to recruiting, harboring, transporting, providing, or obtaining a person for compelled labor or commercial sex acts through the use of force, fraud, or coercion,” Menendez said on the Senate floor.
   “For the first time, we have given teeth to State Department’s Trafficking in Persons Report and will hold nations accountable for their inaction. While the report has provided us with important information, it has relied on moral authority but has had no real-world impact on real-world suffering.
   “Now, should this bill pass and be signed into law, at least we will not reward nations with the worst record on reigning-in human traffickers with the benefits of a fast-track to American markets.
   “My mother was a seamstress in Northern New Jersey. No one worked harder. She came home tired but she came home to her family and was proud of her work.  Not held hostage by her employers, forced to hand over her salary, her passport or worse,” Menendez said.
   Sen. Elizabeth Warren, D-Mass., introduced an amendment that would prohibit fast-track authority for any trade bill that includes a provision for investor-state dispute settlement. Under such a process, foreign corporations can challenge government actions they allege threaten their investments by going to a panel of private arbitrators rather than a nation’s courts.
   U.S. companies say the process is typically beneficial to them when operating overseas because it limits arbitrary government action against their assets.
   More than 100 law professors signed a letter to congressional leaders and the U.S. Trade Representative urging them to oppose such settlement provisions in free trade deals.
   The investor-state proceedings have been used by companies to challenge health, environmental, and labor laws around the world, according to the letter. The law group also complained that arbitrators often are part of a revolving door that has them litigating on behalf of corporations when not on a panel.
   The petitioners included noted legal scholar Lawrence Tribe of the Harvard School of Law and Columbia University Professor Joseph Stiglitz, a Nobel laureate who chaired the Council of Economic Advisors under President Bill Clinton. Stiglitz, who has studied the nation’s income divide, says that trade deals have hurt lower income Americans and contributed to widening economic inequality.
   Treasury Secretary Jack Lew said he would advise the President to veto any trade legislation that includes enforceable rules against currency manipulation. 
   The American Soybean Association said in a statement that it would oppose any trade promotion legislation that included controversial amendments after sponsors Orin Hatch, R-Utah, and Wyden crafted a bill that represents a broad range of interests.
   “There is enough here to bring lawmakers of all stripes to the table, and we believe the clearest path to passage is one that involves a bill with no controversial amendments that make it harder, or in some cases impossible, for lawmakers to support the legislation,” Wade Cowan, the ASA President and a Texas farmer, said in a statement.
   “Erasing tariff and non-tariff barriers in TPP countries will increase opportunities for Louisiana exports. We also believe Louisiana stands to absorb a disproportionate percentage of increased inbound trade from the TPP agreement,” Gary LaGrange, CEO of the Port of New Orleans and Eddy Hayes, chairman of the World Trade Center of New Orleans, wrote in a commentary piece distributed to news outlets. “TPP countries are in a geographically superior position to move cargo through the expanded Panama Canal. We are working hard to ensure that our Mississippi River system enjoys its share of increased Panama Canal traffic. TPP means business for Louisiana throughout our port system and in value-added manufacturing.”
   The Louisiana officials noted that Rep. Charles Boustany’s, R-La., PROTECT Act – currently included in the House version of TPA – is designed to ensure that U.S. companies, such as in the Louisiana shrimp and crawfish industries, can pursue strong enforcement of unfair trade practices by overseas competitors in the U.S. market.
   Meanwhile, Commerce Secretary Penny Pritzker handed out the 2015 President’s “E” Awards to companies making a significant contribution to selling goods in overseas markets, including service providers such as banks and logistics companies.
   Last year, U.S. exports hit a record high of $2.35 trillion. Goods exports grew 2.7 percent to $1.64 trillion. Exports have grown to 13.5 percent percent of the overall economy, compared to 7.5 percent 30 years ago, and have accounted for nearly a third of economic growth since the recession. More than 11.7 million people have jobs that are tied to export.
   The Commerce announcement noted that many of the exporters receiving awards were aided by existing trade agreements the United States has with 20 countries.
   The TPP “will secure fair access to the fastest-growing consumer base in the world, while raising standards on labor, environmental protection, intellectual property rights, and more,” Pritzker said at the ceremony, according to a copy of her prepared remarks. “This will be the most progressive trade agreement in history; will strengthen the competitiveness of our businesses; and will deepen the economic bonds that tie the United States to nations across the Asia Pacific.”

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