Capping two weeks of debate, the Senate voted 62-37 just before Memorial Day recess to restore trade promotion authority (TPA), sending the bill to the House of Representatives. The ultimate bill would also renew the Trade Adjustment Assistance (TAA) program for workers displaced by trade and give trade negotiators options to address currency manipulation, rather than requiring negotiators to include enforceable currency rules in the Trans-Pacific Partnership (TPP), as proposed by Senator Rob Portman (R-Ohio) and Senator Debbie Stabenow (D-Mich.).
TPA’s passage marks a turnaround from May 12, when the Senate fell eight votes short from ending a Democratic filibuster blocking consideration of the bill. TPA is widely seen as a necessary first step to advance significant trade negotiations involving the Pacific region and Europe, TPP, and the Transatlantic Trade and Investment Partnership (TTIP). TPA and the measures that ultimately accompany it could significantly impact business for companies involved in international trade and investment.
What’s In, What’s Out
The TPA bill—introduced by Senate Finance Committee Chairman Orrin Hatch (R-Utah), Finance Committee Ranking Member Ron Wyden (D-Ore.), and House Ways and Means Committee Chairman Paul Ryan (R-Wis.)—would provide the Obama Administration with negotiating objectives for future trade agreements while enabling the president to submit implementing legislation for the final agreement to Congress for an up-or-down vote without amendments. On April 22, the Senate Finance Committee reported out the bill on a bipartisan 20-6 vote.
But debate soon shifted to which measures would accompany TPA. Leading into the failed May 12 vote, some Democratic senators, including Ranking Member Wyden, expressed concern that passing TPA did not guarantee that other measures would also pass, particularly TAA. The Senate Finance Committee had also reported out three other bills: (1) a TAA bill on a bipartisan 17-9 vote; (2) a package that renewed the Generalized System of Preferences, the African Growth and Opportunity Act, and trade benefits for Haiti by voice vote; and (3) a customs enforcement bill by voice vote. The customs enforcement bill included an amendment offered by Senator Chuck Schumer (D-N.Y.) that would allow the Commerce Department to impose duties on products imported from countries determined to manipulate their currency. Other senators called for the currency manipulation amendment to the customs enforcement bill to be added directly to the TPA bill. After the Senate failed to break the filibuster blocking consideration of TPA, pro-trade Senate democrats went to the White House to meet with officials.
Ultimately, Senate Majority Leader Mitch McConnell (R-Ky.), Chairman Hatch, and Ranking Member Wyden orchestrated a “sequencing agreement” that broke the impasse. Under the agreement, the Senate quickly passed the customs enforcement bill and preferences bill, ensuring that both, including the currency countervailing duty provisions in the customs bill, would be part of a House-Senate conference. After the Senate approved cloture, it then debated a bill that combined the TPA and TAA provisions and allowed votes on seven amendments.
In particular, the Senate rejected on a 48-51 vote an amendment by Senators Portman and Stabenow, which would have directed trade negotiators to include currency manipulation rules tied to International Monetary Fund standards. President Obama had threatened to veto the TPA bill if the Portman-Stabenow amendment passed, because it could expose the Federal Reserve to trade actions. It was viewed by Chairman Hatch and Ranking Member Wyden as a “killer amendment” that would bring down TPA. Instead, the Senate passed by a 70-29 vote an amendment offered by Hatch and Wyden that gives negotiators options to address currency manipulation, whether through enforceable rules, transparency and monitoring, or cooperative measures.
In addition, the Senate rejected by a 39-60 vote an amendment by Senator Elizabeth Warren (D-Mass.) to prevent investor-state dispute settlement in future trade agreements. The Senate also rejected by a 36-62 vote an amendment by Senator Jeff Flake (R-Ariz.) to strip TAA reauthorization from the bill.
The House Debate
The bill next heads over to the House. Observers estimate the bill can expect no more than 25 Democratic votes. At the same time, 25 to 50 Republicans are expected to oppose the bill for giving up Congress’s power to amend a trade agreement offered by President Obama or for renewing the TAA program. House leadership is whipping the bill hard to minimize Republican defections, and it is keeping the pressure on business and farm groups to intensify their lobbying. The White House is working hard on House Democrats. Completing TPP is a high priority for President Obama, who got directly involved in lobbying Democratic senators on key TPA votes. House Republican leadership has indicated it will bring the TPA/TAA bill to the floor for a vote during the week of June 2. Assuming it passes the House, the next step would be a House-Senate conference to work out any differences in the House- and Senate-passed versions of the bills.
Special thanks to Timothy J. Ford on his contribution to this update.