Deal Reached on Fast-Track Authority for Obama on Trade Accord

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 Before a Senate Finance Committee hearing on the trade pact Thursday: Senator Robert Menendez, seated at table, and standing from left, Senators Benjamin L. Cardin of Maryland and Ron Wyden of Oregon; Treasury Secretary Jacob J. Lew; and Michael Froman, the United States trade representative. Credit Stephen Crowley/The New York Times

Before a Senate Finance Committee hearing on the trade pact Thursday: Senator Robert Menendez, seated at table, and standing from left, Senators Benjamin L. Cardin of Maryland and Ron Wyden of Oregon; Treasury Secretary Jacob J. Lew; and Michael Froman, the United States trade representative. Credit Stephen Crowley/The New York Times

 

 

 

 

 

 

 

 

 

 

WASHINGTON — Key congressional leaders agreed on Thursday on legislation to give President Obama special authority to finish negotiating one of the world’s largest trade accords, opening a rare battle that aligns the president with Republicans against a broad coalition of Democrats.

In what is sure to be one of the toughest fights of Mr. Obama’s last 19 months in office, the “fast track” bill allowing the White House to pursue its planned Pacific trade deal also heralds a divisive fight within the Democratic Party, one that could spill into the 2016 presidential campaign.

With committee votes planned next week, liberal senators such as Sherrod Brown of Ohio are demanding to know Hillary Rodham Clinton’s position on the bill to give the president so-called trade promotion authority, or T.P.A.

Trade unions, environmentalists and Latino organizations — potent Democratic constituencies — quickly lined up in opposition, arguing that past trade pacts failed to deliver on their promise and that the latest effort would harm American workers.

The deal was struck by Senators Orrin G. Hatch of Utah, the Finance Committee chairman; Ron Wyden of Oregon, the committee’s ranking Democrat; and Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Ways and Means Committee. It would give Congress the power to vote on the more encompassing 12-nation Trans-Pacific Partnership once it is completed, but would deny lawmakers the chance to amend what would be the largest trade deal since the North American Free Trade Agreement of 1994, which President Bill Clinton pushed through Congress despite opposition from labor and other Democratic constituencies.

While supporters have promised broad gains for American consumers and the economy, the clearest winners of the Trans-Pacific Partnership agreement would be American agriculture, along with technology and pharmaceutical companies, insurers and many large manufacturers that say they could also expand United States’ exports to the other 11 nations in Asia and South America that are involved.

President Obama embraced the legislation immediately, proclaiming “it would level the playing field, give our workers a fair shot, and for the first time, include strong fully enforceable protections for workers’ rights, the environment and a free and open Internet.”

“Today,” he added, “we have the opportunity to open even more new markets to goods and services backed by three proud words: Made in America.”

But Mr. Obama’s enthusiasm was tempered by the rancor the bill elicited from some of his strongest allies. To win over the key Democrat, Mr. Wyden, the Republicans agreed to stringent requirements for the deal, including a human rights negotiating objective that has never existed on trade agreements.

The bill would make any final trade agreement open to public comment for 60 days before the president signs it, and up to four months before Congress votes. If the agreement, negotiated by the United States trade representative, fails to meet the objectives laid out by Congress — on labor, environmental and human rights standards — a 60-vote majority in the Senate could shut off “fast-track” trade rules and open the deal to amendment.

“We got assurances that U.S.T.R. and the president will be negotiating within the parameters defined by Congress,” said Representative Dave Reichert, Republican of Washington and a senior member of the Ways and Means Committee. “And if those parameters are somehow or in some way violated during the negotiations, if we get a product that’s not adhering to the T.P.A. agreement, than we have switches where we can cut it off.”

To further sweeten the deal for Democrats, the package includes expanding trade adjustment assistance — aid to workers whose jobs are displaced by global trade — to service workers, not just manufacturing workers. Mr. Wyden also insisted on a four-year extension of a tax credit to help displaced workers purchase health insurance.

Both the Finance and Ways and Means committees will formally draft the legislation next week in hopes of getting it to final votes before a wave of opposition can sweep it away. “If we don’t act now we will lose our opportunity,” Mr. Hatch said.

At a Senate Finance Committee hearing Thursday morning, Jacob J. Lew, the Treasury secretary, and Michael Froman, the United States trade representative, pleaded for the trade promotion authority.

“T.P.A. sends a strong signal to our trading partners that Congress and the administration speak with one voice to the rest of the world on our priorities,” Mr. Lew testified.
Even with the concessions, many Democrats sound determined to oppose the president. Representative Sander Levin of Michigan, the ranking Democrat on the House Ways and Means Committee, condemned the bill as “a major step backward.”

The A.F.L.-C.I.O. and virtually every major union — convinced that trade promotion authority will ease passage of trade deals that will cost jobs and depress already stagnant wages — have vowed a fierce fight. The A.F.L.-C.I.O. announced a “massive” six-figure advertising campaign to pressure 16 selected senators and 36 House members to oppose fast-track authority.

“We can’t afford to pass fast track, which would lead to more lost jobs and lower wages,” said Richard Trumka, president of the A.F.L.-C.I.O. “We want Congress to keep its leverage over trade negotiations — not rubber-stamp a deal that delivers profits for global corporations, but not good jobs for working people.”

In all, the bill sets down 150 negotiating objectives, such as tough new rules on intellectual property protection, lowering of barriers to agricultural exports, labor and environmental standards, rule of law and human rights. Reflecting the modern economy, Congress would demand a loosening of restrictions on cross-border data flow, an end to currency manipulation and rules for competition from state-owned enterprises.

Businesses and business lobbying groups lined up behind the bill as fast as liberal groups and unions arrayed in opposition. “With facts and arguments, we’ll win this trade debate and renew T.P.A.,” vowed Thomas J. Donohue, president of the U.S. Chamber of Commerce.

It all made for a dizzying change of tone in a Washington where partisan lines have hardened. Republican leadership fell firmly behind T.P.A. Business groups battling the president on climate change, taxes and health care urged Congress to expand his trade powers.

But a sizable minority of Republicans — especially in the House — are reluctant to give the president authority to do anything substantive. Whether Republican leaders can get their troops in line, and how Mr. Obama can round up enough Democratic votes, might be the biggest legislative question of the year.

Mr. Reichert, the Republican lawmaker, said 20 or fewer Democrats currently support the measure in the House; last year, House Speaker John A. Boehner of Ohio said he would need 50.

Senator Charles E. Schumer of New York, the third-ranking Democrat, said he will demand the inclusion of legislation to combat the manipulation of currency values, especially by China. “China is the most rapacious of our trading partners, and the stated goal of this deal is to lure these other countries away from China,” Mr. Schumer said. “It’s not at all contradictory to finally do something with China’s awful trade practices.”

Mr. Brown said the negotiating objectives must be turned into solid requirements. “I don’t think negotiating objectives without more enforcement mechanisms get you very far,” he said. “Negotiating objectives are, ‘Hey U.S.T.R., try to get this,’ and they’ll say, ‘We tried.’ We need something better than that.”

Others appeared dead set against the accord.

“Over and over again we’ve been told that trade deals will create jobs and better protect workers and the environment,” said Senator Bob Casey, Democrat of Pennsylvania. “Those promises have never come to fruition.”