US Senate Democrats dealt a clear setback to Barack Obama on Tuesday (12 May), blocking a measure that would have given the president a free hand to swiftly negotiate trade accords.
The Senate failed to pass the Trade Promotion Authority bill, so that Congress would instead get an up or down vote on any trade deal.
The bill would have allowed Obama to submit the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment partnershiop, currently under negotiation, to Congress for an up-or-down vote, with lawmakers prevented from making changes.
All Democrats but one, Senator Tom Carper, voted against formally opening debate on the measure, a procedure that needed 60 votes in the 100-member chamber but failed 52-45.
Republicans backed Obama’s bid for the trade authority, but many Democrats felt betrayed by the measure’s failure to punish currency manipulation or include protections for American workers impacted by globalisation.
The White House says it needs such fast-track authority in order to finalize talks with the 11 other nations in the TPP and with the European Union on TTIP, without the threat of Congress adding amendments once negotiations are complete.
Democrats withdrew their support after Republican Senate Majority Leader Mitch McConnell refused to package the measure with three other trade bills, including one that cracks down on currency manipulation — seen by many as the key impediment to fair trade.
“We know the global economy is a rough sea, and Republicans are asking us to pass a trade package that forces the American worker to navigate those waters in a leaky boat,” said Senator Chuck Schumer, a senior Democrat.
“This should be a top priority for Democrats and Republicans,” said the pro-trade Carper, who had held a last-ditch press conference extolling the benefits of trade promotion authority.
Obama met with 10 Senate Democrats after the vote to discuss the path forward, with the White House saying the president and members remained “committed to continuing work on this important priority.”
Trade authority supporters say the legislation would require 150 congressional negotiating priorities be met in the trade pact, including provisions on human rights and the environment.
Trade deals as job-killers
But critics say the accord, under negotiation in secrecy, is a job-killer that prioritizes corporate interests over those of American workers.
“We want more trade, we just want it under very different definitions and very different rules,” said Senate Democrat Sherrod Brown, who is helping lead opposition to the Pacific trade deal.
Critics argue that uniting 12 nations in a free-trade zone would prompt a race to the bottom on wages, with the US workforce unable to compete with cheap labor in pact partners like Chile, Peru and Vietnam.
“Trust us to know what’s good for workers. This ain’t it,” said Richard Trumka, president of the AFL-CIO, America’s largest labor organization representing 12 million workers.
Public support for foreign trade is high in the US. According to Gallup, 58% of Americans see it mostly as an opportunity—a figure that has risen 17 percentage points since the recession—and only 33% see it as a threat. Republicans’ views have not changed much, but the proportion of Democratic voters who see trade positively has shot up from 36% to 61% since 2008.
Negotiations between the United States and the European Union to forge an ambitious Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.
If successful, the deal would cover more than 40% of global GDP and account for large shares of world trade and foreign direct investment.
The EU-US trade relationship is already the biggest in the world. Traded goods and services between the two partners are worth €2 billion daily.
Brussels and Washington have set an ambitious goal of completing negotiations by the end of 2015.
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