NY Times: "Congressional Panels Approve Fast Track for Trade Deal, With Conditions"

April 24, 2015


WASHINGTON — House and Senate committees this week easily agreed to give President Obama fast-track authority to negotiate a sweeping trade accord with Pacific nations, but the package of bills intended to speed completion of the deal also imposes difficult burdens on its negotiators.

[by Jonathan Weisman | April 23, 2015 | NY Times]

Senators demanded tough limits on currency manipulation by trading partners of the United States and placed restrictions on the import of products made with child labor. One provision would prohibit consideration of trade agreements with any country considered a violator of human-trafficking rules, a seemingly noncontroversial addition. But it could knock Malaysia from the deal, a 12-nation accord still being negotiated known as the Trans-Pacific Partnership.

Another provision would preclude trading partners from organizing boycotts, imposing sanctions or pressing divestment on Israel — popular here, less so in the Muslim countries in the deal.

As the trade promotion authority bills head to the House and Senate floors in coming weeks, skeptics and opponents have made it clear they are not finished.

“There’s not been a T.P.A. considered seriously by the House and Senate for 12 years, so this is something we take seriously,” said Senator Sherrod Brown, Democrat of Ohio, who helped win passage of the currency manipulation amendment and promised many more proposals for the Senate floor.

The House Ways and Means Committee on Thursday voted 25-13 on a bill that would give Congress the ability to vote yes or no on trade agreements, but without the ability to make amendments, over the next five years. Representative Paul D. Ryan, Republican from Wisconsin, the committee’s chairman and an ardent trade supporter, kept his party in line and voted down substantive changes to the bill.

Senate Republicans were less successful in defending a delicate fast-track compromise from significant changes. The Senate Finance Committee voted 20-6 for similar legislation late Wednesday night, but only after a bipartisan group of skeptics imposed new demands.

The trade promotion measures already included strict and burdensome demands, including a four-month delay between the completion of a trade accord and consideration by Congress, and a two-month public comment period before the president could finally sign a deal. That delay is likely to push congressional consideration into the next presidential election season, an unappealing prospect for supporters.

But Congress is also poised to raise the bar for negotiators. Treasury Secretary Jacob J. Lew maneuvered for months to avoid a requirement that future trade accords include measures to prevent countries from artificially depressing their currencies, which make their exports cheaper and United States imports more expensive.

The Obama administration worries that would backfire on the United States if trading partners objected to the Federal Reserve’s use of currency sales or purchases to spur American economic growth. Administration officials say currency issues should be dealt with delicately, by multilateral organizations like the Group of 20 largest industrial economic nations.

“The legislation raises questions about consistency with our international obligations, and other countries might pursue retaliatory measures that could hurt our exporters,” Mr. Lew wrote in a letter to Congress on Tuesday.

Senators in both parties disagreed. The Finance Committee voted 18-8 to add a provision to force the Commerce Department to treat currency manipulation as an illegal export subsidy and impose duties to counter it.

The amendment was added to a separate customs enforcement bill moving alongside the trade promotion authority legislation — a victory of sorts for the administration, which beat back a separate currency measure that was to be added to the trade bill. But lawmakers said they would move in coming weeks to merge the customs and trade promotion bills.

“Because China is now stealing from our best industries and hurting us in tech and in pharma — it’s no longer just furniture and clothing, as important as they were — we have to do something,” said Senator Charles E. Schumer, Democrat of New York.

A surprise addition from Senator Robert Menendez, Democrat of New Jersey, was an innocuous-sounding “No Fast Track for Human Traffickers” amendment, which would prohibit expedited consideration of trade agreements with any country in the top tier of the State Department’s human trafficking list. Included in that list of 23 nations in Malaysia.

Mr. Menendez said his amendment came up just hours after the Senate approved a new anti-human-trafficking bill 99-0, so administration officials should not have been surprised.

“It’s a very simple proposition: We shouldn’t give fast-track status to countries engaged in human trafficking,” he said. “They still can get involved. They just have to get their act together.”

An administration official involved in the trade talks said the legislation had far to go before it reached the president’s desk. But the official, who spoke on condition of anonymity, made it clear the White House would oppose Mr. Menendez’s amendment.

“Blocking agreements with countries like Malaysia removes an important and effective incentive for them to improve their practices,” the official said.

The official added that the White House was working with Congress to find “responsible options with objective standards and strong potential remedies” to deal with the currency issue. But the official said the administration remained opposed to the Senate legislation.

The White House has a strong ally in Mr. Ryan. The chairman maintained firm discipline on his committee in a formal drafting session on Thursday that took all day and produced virtually no change to the initial bill. Mr. Ryan, who ran against President Obama in 2012 as the Republicans’ vice-presidential nominee, found himself defending the president against attacks by his own party.

“This is a strange world we’re in these days,” Mr. Ryan said.

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