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American Shipper

Senate passes ‘fast-track’ trade authority

Trade Promotion Authority gives the White House more freedom to negotiate major free trade agreements with Pacific Rim and European partners.

   The Senate on Friday passed Trade Promotion Authority that gives the White House more of a free-hand to negotiate major free trade agreements with Pacific Rim and European partners.
   President Obama has made completion of a Trans-Pacific Partnership agreement, under negotiation for several years now, a top item on the economic agenda as he tries to secure his legacy with 18 months remaining in office. The trade deal, which would be the largest and most comprehensive ever for the United States, would lower tariffs and open markets to U.S. goods in 11 Asian, South American and North American countries, while also strengthening protections for intellectual property.
   TPA, which expired in 2007, is a negotiating tool that gives Congress the ability to give up front input on negotiating priorities for trade deals, but then take a ratification vote upon completion without the ability to make changes to the document. The idea is to give confidence to other nations to commit to a deal knowing that the agreement won’t be picked apart by Congress and, therefore, require further negotiation.
   The “fast-track” authority is widely opposed by progressives who say previous trade agreements have only facilitated the outflow of manufacturing jobs to low-cost countries, in part because those nation’s don’t have high environmental and labor standards that make it more expensive for companies to operate.
   The Senate voted 62-37 for TPA, with 14 Democrats siding with the Republican majority. But passage of TPA was actually much harder than the vote indicated. It took a great deal of parliamentary maneuvering just to get the bill to the floor for debate. Renewal of Trade Adjustment Assistance to help retrain workers displaced by trade was added to the trade package, but did little to mollify opponents.
   Several amendments that would have severely restricted the President’s ability to conclude a Trans-Pacific Partnership deal were defeated.
   Sen. Elizabeth Warren’s, D-Mass., amendment would have denied “fast-track” authority to any trade deal that includes an investor-state dispute settlement mechanism. Social justice organizations, backed by many legal scholars, claim that the ability of multinational corporations to challenge government action before a panel of private arbitrators will undermine the court system in the United States and that governments and citizen groups can’t bring claims against corporations.
   Also defeated were amendments that would have required any trade agreements to include strong, enforceable provisions against currency manipulation, which keeps the value of a currency below that of the dollar. Artificially adjusting the exchange rate by intervening in currency markets makes a nation’s goods cheaper to sell in the United States and makes U.S. goods more difficult to sell in other countries, most notably China and Vietnam. 
   Christina Bellantoni, editor-in-chief of Roll Call, said Friday on National Public Radio’s “Diane Rehm Show” Republican leaders are making a political calculation to give the president, who they still are suing over the Affordable Care Act and say has overreached in areas such as immigrant deportations, a victory on trade because they’d rather see the Democrats upset within their own party, particularly with the presidential race ramping up and Hillary Clinton under increasing pressure to take a side on the issue.
   Obama insists he is a progressive and wouldn’t be for the deal if it didn’t include protections for labor conditions, the environment, and jobs.
   Bellantoni said most of the Democratic base doesn’t understand the particulars in the TPA and the TPP, but that organized labor and other groups have done a good job of conditioning the grass roots to fear trade.
   Business groups hailed the TPA vote as a step toward creating more jobs and economic growth.
   “By coming together to pass TPA, a bipartisan majority in the Senate clearly demonstrated confidence in the ability of American workers and farmers to compete and win in world markets — if the playing field is level,” U.S. Chamber of Commerce President Thomas Donahue said in a statement.
   Some trade associations noted that without TPA the United States has fallen behind other nations that have formed trade partnerships, making their industries better able to land international business at the expense of American exports.
   “As American companies increasingly deliver products and data overseas, trade rules must ensure they don’t face unfair restrictions. The Senate’s action will help advance America’s leadership in an increasingly global marketplace, particularly in the highly competitive information and communications technology industry,” Telecommunications Industry Association CEO Scott Belcher said.
   Attention now turns to the House, where the TPA faces an uncertain future amidst strong Democratic opposition. A successful vote will likely require backing by most of the Republican caucus, but many in the Tea Party wing are wary of giving President Obama more executive powers because they believe he has overstepped his constitutional bounds on other issues. TPA, however, would remain with whomever succeeds Obama in office.

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