GOP Election Victory Opens Pathway to Trade Bill


The Republican victory in the Senate won’t guarantee passage of stalled trade legislation, but it does sideline the bill’s biggest foe this year: Sen. Harry Reid.

[By William Mauldin, 11/5/14, The Wall Street Journal]

The Senate majority leader, a Nevada Democrat, dealt a body blow to President Barack Obama ’s trade policy in January when spoke against legislation that eases congressional passage of the international agreements. His comments, apparently to help protect fellow Democrats in the election, drew heightened attention because they came just hours after Mr. Obama endorsed the legislation in his State of the Union address.

Sen. Reid’s rebuke was picked up by Rep. Nancy Pelosi , the House minority leader, and other members of their party and gave Democrats, who often oppose trade agreements, some breathing room on a divisive issue during the election year.

Nine months later, the Obama administration is closer to finishing negotiations with Japan and 10 other Asia-Pacific countries on a deal that would lower or eliminate tariffs and set rules of the road in labor and the environment for a third of global trade.

To pass complicated trade agreements, Congress typically works out a system in advance to ensure the deals won’t get bogged down in procedural delays or blocked by individual lawmakers concerned about fallout in their districts. The system—known as trade promotion authority or fast track—also sets official U.S. goals for trade agreements and can help with enforcement.

Mr. Reid effectively blocked a version of fast track worked out by former Sen. Max Baucus of Montana, the previous chairman of the Senate Finance Committee and current U.S. ambassador to China; Sen. Orrin Hatch of Utah, the top Republican on the finance committee; and Rep. Dave Camp of Michigan, chairman of the House Ways and Means Committee.

Since then, the new finance chief in the Senate, Ron Wyden of Oregon, has been working on a version of fast track that would appeal to more Democratic lawmakers.

Many congressional Democrats are concerned fast track would pave the way for a deal that allows manufacturing jobs to move to cheap-labor countries in the Pacific trade bloc, including Vietnam. They also worry the Pacific framework—called the Trans-Pacific Partnership, or TPP—could lead Detroit to lose ground to Japan’s auto industry, a weakening of corporate environmental standards and the boosting of patent protection for pharmaceuticals in ways that would raise medicine prices in poorer countries.

Mr. Obama and Republicans see benefits to businesses, as well as the potential for extra economic growth. Minority Leader Mitch McConnell expressed interest this week in moving trade legislation, Administration officials don’t deny that a Republican-led Senate could help Mr. Obama’s trade agenda.

“It speeds it because if Harry Reid is no longer controlling the calendar—that’s a big thing,” said Gary Hufbauer, trade expert at the Peterson Institute of International Economics in Washington.

A spokesman for Sen. Reid didn’t respond to a request for comment on fast track before Tuesday’s election. Observers say Mr. Reid has tended to oppose trade legislation personally rather than work to block its passage.

To push the administration’s trade policy, U.S. Trade Representative Mike Froman and his staff have held some 1,500 briefings on Capitol Hill on the TPP.

This year’s congressional friction on trade in Washington is making it harder for Mr. Froman to strike an attractive deal overseas, people following the talks say. Foreign officials don’t want to make politically painful sacrifices in a trade deal if the agreement could be halted or gutted by Congress.

Of course, Republican control of both chambers doesn’t make trade a slam dunk. Mr. Hufbauer said the administration needs to get about 20 House Democrats signed up to pass fast track in the lower chamber.

Even with a GOP advantage in the Senate starting in January, several Democrats would need to step forward to bring the measure to a vote without risking a filibuster.

“As it goes through the process of moving through Congress, we’re going to rely on a bipartisan majority to get that done,” White House press secretary Josh Earnest told reporters Monday.

That won’t be easy in the current environment, especially after TPP and fast-track opponents attracted a wide following this year.

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