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US Senate Advances Obama Trade Agenda

U.S. President Barack Obama delivers remarks on trade at Nike's corporate headquarters in Beaverton, Oregon, May 8, 2015.
U.S. President Barack Obama delivers remarks on trade at Nike's corporate headquarters in Beaverton, Oregon, May 8, 2015.

The U.S. Senate has bolstered President Barack Obama’s trade agenda by voting 65-33 to begin debate on a bill facilitating the approval of a free trade pact among 12 Pacific Rim nations that account for 40 percent of global economic output.

“This debate will determine whether our nation is willing and able to accept the challenges of the world economy, or whether we continue in retreat and yield to the siren song of isolationism and protectionism,” said Republican Senator Orrin Hatch, who co-authored Trade Promotion Authority [TPA], a bill that subjects trade accords to up-or-down congressional votes with no amendments allowed.

“It will determine whether we as a nation are able and willing to set the rules for the world economy, or whether we will sit on the sidelines and let other countries create the rules,” said Hatch.

Two days after Democrats blocked debate on TPA, a faction of pro-trade Democrats joined with Republicans Thursday to advance the measure, which has the firm backing of the Obama administration.

Still, a sizable number of Democrats – normally loyal to Obama – voted “no” including Senator Bernie Sanders, an Independent who caucuses with Democrats.

“Any objective look at these trade agreements will tell us that they have cost us millions of decent-paying jobs, and have led us to a race to the bottom where American workers are forced to compete against workers in low-wage countries who are making pennies an hour,” said Sanders, who is also a Democratic candidate for president.

Trans-Pacific Partnership

TPA backers insist the shortcomings of previous trade legislation, like the North American Free Trade Agreement, NAFTA, have been corrected.

“We are putting in place a modern trade policy, a trade policy that sets aside once and for all the NAFTA playbook of the 1990s,” said Democrat Ron Wyden. “It must start with a tough, robust, effective trade enforcement package.”

TPA is viewed as critical for concluding the 12-nation Trans-Pacific Partnership (TPP), which has been negotiated for years. It will be merged with a bill to assist American workers displaced by new trade pacts, satisfying a key demand of Democratic lawmakers.

The trade debate exposed an acrimonious rift between President Obama and a sizable number of congressional Democrats leery of new trade deals or strongly opposed to them. In recent weeks, the White House publicly disagreed with those lawmakers, earning unusual praise from the Senate’s Republican majority leader, Mitch McConnell, who hailed the advance of trade legislation as “good news for America’s middle class.”

“I’d like to thank the president,” said McConnell. “No, you’re not hearing things. President Obama has done his country a service by taking on his [political] base and pushing back on some of the more ridiculous rhetoric we’ve heard.”

Congressional debate could rage for weeks on TPA, which America's business community overwhelmingly supports and labor groups and environmentalists fiercely oppose.

Actions on Tariffs and Currency

Before the procedural vote on TPA, the Senate voted 78-20 to approve a bill cracking down on currency manipulation by America’s economic competitors, especially China.

“China seems to feel it can get away with any kind of trade misdeed,” said Democrat Chuck Schumer. “We must do something that shows China once and for all they just can’t get away with it.”

Hatch expressed concerns that punitive currency provisions would invite retaliatory measures by other countries against U.S. monetary policy.

The Senate also voted 97-1 to approve preferential tariff treatment for goods produced in African and other developing nations.

“This renewal of the AGOA [African Growth and Opportunity Act] law takes the program to the next level,” said Wyden. “I believe it works for our country, for Sub-Saharan Africa, and it ought to be a cornerstone of our economic policy in the region.”