Politico: Trade fight looms as Congress returns

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Orrin Hatch and Ron Wyden appear poised to introduce a “fast track” trade promotion authority bill along with House Ways and Means Committee Chairman Paul Ryan.

[Reposted from Politico  |  Doug Palmer and Adam Behsudi  |  April 13, 2015]

A smoldering debate over trade is expected to get even hotter after Congress returns from its two-week spring break.

Senate Finance Committee leaders Orrin Hatch and Ron Wyden appear poised to introduce a “fast track” trade promotion authority bill along with House Ways and Means Committee Chairman Paul Ryan. But months of closed-door negotiations were continuing on Friday, congressional aides said.

The power, largely embraced by Republicans, pits many congressional Democrats, including Sen. Elizabeth Warren and potentially Senate Democratic leader-in-waiting Charles Schumer, against the White House.

The measure would allow President Barack Obama to submit free trade agreements to Congress for straight up or down votes without any amendments. It’s seen as key to completing his signature 12-country trade deal known as the Trans-Pacific Partnership pact.

“The Trans-Pacific Partnership has been negotiated in secret for the last five years and now Members of Congress are being asked to rubber stamp it. That is unacceptable,” said Connecticut Rep. Rosa DeLauro, leader of a vocal Democrat opposition. “Congress has the responsibility to fight for the jobs and wages of the people that we represent. Fast track for the TPP takes us out of that fight, resulting in fewer good paying jobs and lower wages.”

Forces on both sides of the debate are ready for a fight once the bill is dropped. Proponents need to act fast or risk losing their opportunity to move the bill in the upcoming six-week work session because of competing demands for floor time.

TPA has been used by Democratic and Republican presidents over the past 40 years to complete more than a dozen trade agreements, but opponents to giving Obama the authority call the process undemocratic. They’re prepared to intensify their fight against it this week.

Union groups, environmental advocates and other opponents are promising an “unprecedented week of action filled with grassroots activity to pressure Congress” to kill the legislation. The actions include rallies, phone calls to members of Congress, door-to-door canvassing and petitions. Union members will hold a rally on Wednesday on Capitol Hill.

“The main issue next week that we’ll be shouting about — and we will shout, millions of us — is that this not what democracy looks like,” Larry Cohen president of the Communications Workers of America, told POLITICO. “It’s about time we got rid of fast track.”

But farm and business groups see the legislation as essential to expanding exports and also have been busy both on Capitol Hill and in the congressional districts.

“The business community has been making the case for how trade and trade agreements strongly support U.S. growth and jobs and why TPA is critical for Congress to help ensure strong outcomes in trade negotiations for American businesses of all sizes, farmers and workers,” said Dave Thomas, president of the Trade Benefits America Coalition, a collection of more than 250 companies and associations. “We will continue to advocate our position until Congress passes TPA legislation.”

The weeks ahead have all the makings of an epic trade battle not seen in Congress since 2005, when Republicans muscled through an agreement with five Central American countries over the protests of Democrats, including House Minority Leader Nancy Pelosi. So far, Pelosi has stayed relatively neutral in the fast track debate.

Once a deal is announced, Finance Committee Chairman Hatch is expected to move quickly to a vote in the panel, where Wyden and five other Democrats could join 14 Republicans in approving the bill by a 20-6 vote. It would go next to the Senate floor where 60 votes are needed for approval because of a potential filibuster threat from Warren and others.

The number should be achievable because Republicans control the chamber with 54 votes, almost all of whom are expected to vote for the bill. If Wyden can corral six to 10 Democratic votes, that could be enough to put it over the top, even though Senate Minority Leader Harry Reid is expected to vote against the legislation.

“I don’t think they’ll have any trouble getting to 60 votes,” said Michael Smart, a former Senate Finance Committee staffer now at Rock Creek Global Advisors, an economic policy advisory shop. “But what you’d like to see is a comfortable margin” to help build support among Democrats in the House.

Republican leaders in that chamber are downplaying suggestions as many as 60 of their 244 members could vote against TPA, which would require 34 Democratic votes to squeak out a narrow majority. However, some Republicans are expected to oppose the measure, requiring an assist from Democrats to put it over the top.

Estimates of potential Democratic yes votes range from as low as 10 to as high as 50, with proponents hoping for the largest bipartisan vote possible. Key to the outcome are 17 Democrats who voted for free trade agreements with Colombia, South Korea and Panama in 2011 as well as 25 more that voted for two of the pacts.

A test of support will come in the Ways and Means Committee, where Rep. Sander Levin, the top Democrat on the panel, opted out of talks with Hatch, Wyden and Ryan on a bipartisan TPA bill.

Levin has argued instead that Congress should wait until the final contours of the Trans-Pacific Partnership deal are clearer before approving the fast track legislation. But Republicans argue vociferously the White House can’t get a good Trans-Pacific deal until it has trade promotion authority.

With Levin likely to oppose fast track, all eyes are on Rep. Ron Kind, a junior member of Ways and Means and chairman of the New Democrat Coalition, which is expected to provide the bulk of Democratic votes for TPA. Beyond Kind, it’s hard to identify clear Democratic votes on the panel, although several lawmakers have a track record of supporting trade pacts.

The critical moment will be when the bill hits the floor, a test of both the White House’s ability to convince wavering Democrats to support a lame-duck president’s legacy achievement and Republican leaders to persuade their members who loathe Obama to give him a political victory.

Multiple House Democratic aides, whose bosses are on the fence, note the extreme political difficulty that could come with voting for a TPA bill that could be only supported by 10 to 15 other Democrats. “This is the most difficult vote Democrats will take this Congress, by a wide margin,” one aide said, noting that unions are in lockstep on opposing the deal — even groups, like the longshoremen, who would benefit from increased trade.

CURRENCY PROVISION: A POTENTIAL BOX OF TROUBLE

Two big unknowns in the trade debate involve Democratic demands for renewal of Trade Adjustment Assistance to help retrain workers displaced by trade and bipartisan efforts to give a resistant Obama administration new tools to defend U.S. companies against foreign currency manipulation, an impulse aimed mainly at China.

Congress often renews TAA along with major trade legislation, even though many Republicans are skeptical of the value of the program.

Hatch, no fan of TAA, has signaled his willingness to move a renewal bill along with trade promotion authority. But House Republicans are expected to insist the two issues be kept separate so they have a chance to vote against the displaced worker program that dates back to the Kennedy administration. Without the program’s renewal, it’s expected to be much harder to persuade fence-sitting Democrats to vote for fast track.

Meanwhile, Schumer, also a member of the Finance Committee, has pushed for China currency legislation to either be part of a package with trade promotion authority or to move in tandem with the bill. His legislation would direct the Commerce Department to treat undervalued currencies as an export subsidy so duties could be imposed on some Chinese goods.

The administration worries that could open a Pandora’s Box of trouble with Beijing and potentially backfire on the United States. But Schumer is expected to press the issue during committee debate and could get support on the panel from Republican Sen. Rob Portman, who is facing a tough reelection battle in Ohio next year. He has joined many others in calling for rules against currency manipulation in the Trans-Pacific Partnership, which the administration opposes.

Hatch and Wyden are expected to defend their carefully crafted work product, which builds on a bill Hatch introduced last year with former chairmen of the Senate Finance and House Ways and Means committees. Wyden has pushed to put his own mark on the bill, including a modified procedure to strip fast track protection from a trade agreement if lawmakers feel the White House has not consulted adequately or negotiating objectives are not met.

One congressional aide said Hatch appears to have given Wyden much of what he wanted on that point, but there was no confirmation from either office.

Another issue likely to stir debate on the Hill is an investor-state dispute settlement provision expected in the Trans-Pacific Partnership pact. The measure, included in U.S. trade pacts, allows companies or individuals to sue governments for compensation over decisions that damage the value of foreign investments they have made.

Critics like Warren say the “investor-state dispute settlement” mechanism undermines the rights of governments to regulate; proponents reject that charge and say it gives investors some measure of confidence they will be treated fairly when they put millions, if not billions, of dollars at risk in a foreign project.

“This deal would give protections to international corporations that are not available to United States environmental and labor groups,” the Massachusetts Democrat said in an interview with POLITICO. “Multinational corporations are increasingly realizing this is an opportunity to gut U.S. regulations they don’t like.”

Once floor action begins, “the only thing that is predictable is there will be a lot of amendments offered but very few will pass,” said Bill Reinsch, president of the National Foreign Trade Council, a business group.

—Victoria Guida contributed to this report

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