Fast-Track Authority Fails: Is TPP a Goner?

Mission accomplished for trade-bashers; will Obama's congressional foes successfully derail TPP again?

While trade has been a moribund topic Stateside for quite a long time, the US Congress voting on whether to grant President Obama fast-track authority--or that which enables him to secure trade deals like the Trans-Pacific Partnership currently being negotiated and have them voted on a yea/nay basis instead of being amended or filibustered--was bound to generate some interest. Unfortunately for Obama, he has just failed to secure the 60 votes needed in the Senate. With fast-track authority stalled, is the TPP too? (The House votes on fast-track authority soon as well.)

Senate Democrats on Tuesday blocked a bill that would give President Barack Obama fast-track authority to expedite trade agreements through Congress, a major defeat for the president and his allies who say the measure is necessary to complete a 12-nation Pacific trade deal that is a centerpiece of the administration’s economic agenda.The vote was 52-45, with supporters short of the 60 votes necessary to clear a procedural hurdle to advance the bill.

The Senate action almost certainly won’t be the last word on the issue. Most observers believe a majority of senators support the fast-track measure as well as the Trans-Pacific Partnership, the big trade deal whose path would be smoothed by fast-track. But the procedural setback means Senate Majority Leader Mitch McConnell (R., Ky.) must regroup in an effort to assemble the support necessary to advance the measure past the chamber’s 60-vote threshold.

Who voted against fast-track authority? Mostly Democrats--for the most part anti-trade--and more so nowadays after years and years of moribund incomes in the US which they usually blame on trade liberalization. Senate Democrats asked fast-track authority to be bundled with all sorts of other things like retraining for those who lose their jobs due to trade liberalization and the ever-popular currency manipulation chestnut. In the absence of most of these, well, they just turned their own president down:

“This issue’s not over,” Mr. McConnell told reporters shortly before the vote, which he expected to lose. “I’m hopeful we’ll put this in the win column for the country sometime soon.”

Tuesday’s vote reflected a number of objections, on substance, politics and Senate procedure. The bulk of the no votes came from Democrats, led by Senate Minority Leader Harry Reid, of Nevada, who demanded that the fast-track measure be packaged with three other measures: one providing assistance to workers hurt by trade; a customs bill that includes worker protections and language to push the administration to do more to combat currency manipulation; and one extending an expiring program that provides trade preferences to sub-Saharan African countries.

Earlier in the day, Mr. McConnell had agreed to combine the bill with the workers’ aid measure, known as Trade Adjustment Assistance. That program would provide $450 million a year through 2021 for job training for workers displaced by trade deals. Some Republicans argue including that provision could further complicate the trade measure’s chances for approval by the Senate, but it was seen as helpful to winning the support of some Democrats who felt strongly about the effect of trade on workers.

The other two measures were left out, including the customs bill, which angered Democrats who wanted its provisions aimed at ensuring greater enforcement of the terms of trade deals. They were concerned that if enforcement measures were voted on separately, they would be left behind as the basic fast-track package moves ahead through Congress. The customs bill also included measures to combat currency manipulation, which they see as an unfair trading practice.

So Obama and the Republicans--well, those who are not knee-jerk anti-Obama sorts--will try to regroup and gain the necessary 60 votes for a filibuster-proof majority. Based on the Senate vote, the House vote may not be so promising, either. This story is not over yet since they will try again. You get the feeling though that a "clean" fast-track authority is not possible and that granting this authority will only happen if all sorts of doodads are added on to it to make Democrats happy. In the meantime, the other TPP participants are probably quite displeased. After all, why negotiate a trade deal that won't even pass muster in its main proponent's legislature? Time is obviously running out for Obama since he has but one year left in office.

Also see the FT's backgrounder on fast-track authority if you want more specifics on its nuances.