U.S. lawmakers proposed a bill to give the White House power to fast-track international trade agreements as the United States gears up for a hectic year of trade negotiations.
The bill would let the administration put trade deals before Congress for an up or down vote without amendments, a move backed by big business and farmers but viewed with caution by others. Without that assurance, trading partners could be less willing to sign deals.
The fast-track power would help the United States in negotiations this year with Pacific Rim and European Union countries on two separate pacts that would encompass nearly two-thirds of the global economy and trade flows.
Under the bipartisan Trade Promotion Authority (TPA) proposal, avoiding currency manipulation would be set as a goal for U.S. trade negotiators, a controversial measure that may upset major trading partners. Aides said the bill would also strengthen rules for agriculture.
“The TPA legislation that we are introducing today will make sure that these trade deals get done, and get done right,” said Democrat Max Baucus, chairman of the Senate Finance Committee, which has jurisdiction over trade.
The committee’s senior Republican, Orrin Hatch, and Representative Dave Camp, the Republican chairman of the House Ways and Means Committee, which also oversees trade issues, joined Baucus in backing the bill.
But passage is not assured. Representative Sander Levin, the top Democrat on the Ways and Means panel, declined to join the proposal and said he was working on separate legislation.
Critics of the fast-track power say it erodes transparency and accountability and does not protect local workers, which unions say is of particular concern with the Trans-Pacific Partnership, or TPP.
“More U.S. jobs would be shifted overseas and U.S. workers would suffer lower wages as companies look to countries like Vietnam, where the average hourly wage is 75 cents,” Communications Workers of America President Larry Cohen said in a statement. Vietnam is a TPP partner.
The White House welcomed the proposal and said failing to act could leave the United States at a competitive disadvantage.
“We need to use every tool we have to knock down trade barriers,” it said in a statement. “If we don’t seize these opportunities, our competitors surely will.”
The U.S. Chamber of Commerce has said it will lobby lawmakers to support the fast-track power, which lapsed in 2007, and said sealing the trade pacts was vital for jobs and growth.
Trade deals can lower the cost of goods imported into the United States and boost markets for U.S. exports, which Obama said in 2010 he wanted to double by 2015.
Currencies in Focus
The bill would give members of Congress access to negotiating texts of trade agreements and allow them to participate in talks as advisers to the U.S. negotiating team, a change from earlier fast-track laws.
Levin said it did not go far enough to involve lawmakers in trade talks or to prevent currency manipulation by trading partners, adding that the TPP should include a specific currency clause.
U.S. automakers, worried that Japanese competitors may gain an edge in the local market, said earlier all TPP signatories should pledge not to manipulate currencies, on pain of having tariff benefits under the pact suspended.
“If Japan is going to be part of this, it has to open up its market,” Levin said.
Including a currency goal in the TPA does not mean a similar provision will be included in all U.S. trade agreements. But Senate aides said U.S. negotiators would be expected to show progress toward meeting the objective.
Ted Truman, a Treasury official under former President Bill Clinton, said it made no sense to burden trade talks with a currency provision. “My concern is that I don’t think you can get anything that means anything and it’s likely to be a deal-breaker,” he said.
Other negotiating objectives set out in the proposal may also raise eyebrows among trading partners. Senate aides said the bill would seek “robust and enforceable” rules on food safety and animal and plant health regulations - sticking points in relations with China and Europe, among others.
The bill would also set a “high standard” for intellectual property protection. Developing countries complain that strong patent protection for drug companies makes medicines too expensive.
National Foreign Trade Council President Bill Reinsch said he was confident that TPA would be approved but said he hoped the fight would not be as bitter as in 2001 and 2002, when it passed with a slim margin and only after last-minute concessions.
“What worries me about it is not that they won’t get it done. What worries me about it is that it’s going to end up being the same kind of nasty, partisan fight it was 13 years ago,” he told reporters. (Reuters)