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Trade Deals Threatened By Hill Opposition

November 18, 2013
The Hill
Vicki Needham and Ben Goad

The White House is facing mounting opposition over its handling of global trade agreement negotiations, a development that could torpedo the nation's most ambitious trade agenda in U.S. history. 

Congressional lawmakers have launched a two-pronged assault: A majority of both chambers are insisting on the inclusion of enforceable currency manipulation provisions in any new trade pact, while a growing bipartisan group of House members are set on opposing an easy avenue to passage.

With angst building across the Capitol, another top Obama administration priority is at risk of faltering.  

Sen. Lindsey Graham (R-S.C.) and Rep. Sandy Levin (D-Mich.) each said this week that they would oppose the 12-nation Trans-Pacific Partnership (TPP) agreement if it failed to include a framework to punish countries that deliberately lower the value of their currency to gain an economic advantage.

The lawmakers said they have the votes and will not yield ground. Sixty senators and 230 House members have sent letters to President Obama and Treasury Secretary Jack Lew urging them to press the issue in talks over the Asia-Pacific deal.

U.S. Trade Representative Michael Froman acknowledged lawmakers' concern at the U.S. Chamber of Commerce on Thursday. 

"It’s gotten a lot of attention on Capitol Hill and among various industries, and it's an issue we’re very focused on," he said. 

"We are continuing to consult with Congress, with stakeholders, to determine how best to deal with the issue."

Graham and Levin said there is plenty of energy behind their effort to add clear rules on currency manipulation to TPP and now is the time to deal with the issue.

"It's time to crack the nut," Levin said. "Jawboning alone is not enough."

In fact, support for the provisions has attracted a broad and diverse coalition from labor unions and U.S. automakers to manufacturers, academics and economists who all argue that the U.S. economy has lost millions of jobs and billions in economic growth because of the practice.

Matt Blunt, head of the American Automotive Policy Council, called the practice of devaluing currency the "greatest impediment to real free trade."

The other hurdle for the White House involves at least 173 House lawmakers — 151 Democrats and 22 Republicans — who have written letters to the White House opposing trade promotion authority (TPA). 

Under TPA or fast-track authority, administration negotiators send completed trade deals to Congress for an up-or-down vote, affording lawmakers no opportunity to submit amendments. 

The authority, which last expired in 2007 and has not been renewed, is designed to give U.S. trading partners greater assurance that Congress won't unravel carefully drafted language that took years to hammer out. 

But critics argue that the Obama administration has largely left them in the dark on TPP's details and that fast-track authority would give President Obama too much power in negotiating global agreements.

"It is past time for members of Congress, as representatives of the people, to reassert our authority when it comes to these trade agreements,” said Rep. Rosa DeLauro (D-Conn.), who is helping to lead the charge against TPA. 

But John Murphy, vice president for international affairs at the Chamber, countered lawmakers concerns. He argued that, by not completing TPA, they are ceding their authority to the executive branch. 

"TPA builds on this constitutional partnership by allowing Congress to set the negotiating objectives for U.S. trade agreements and requiring the executive branch to consult extensively with Congress during negotiations," he said. 

"Without TPA, the executive branch may consult with Congress when and if it chooses."

Froman, for his part, has said that his aim is to improve transparency and provide greater access to the TPP's chapters while keeping members — especially those closely involved with trade — in the loop. 

He has insisted that trade agreements require congressional input, thus the need for fast-track authority. 

Still, the complaints continue.

Concerns have abounded about the contents of the TPP, portions of which were released by WikiLeaks, causing further consternation among lawmakers and stakeholders who say they are being left out the process. 

While a growing number are opposing fast-track authority, Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) are very close to reaching an agreement on a bill. They hope to introduce a measure before the end of the year.

"Without TPA, we cannot reap the benefits of the Trans-Pacific Partnership,” Baucus said Thursday at the Chamber. “TPA greases the skids.”

Baucus said he remains intent on moving a bill through his committee by year’s end, and that he is hopeful the House will take a similar step. 

As part of that process, TPA should take the concerns, especially about currency, into consideration.

“We have to listen to it, I mean we’re a democracy,”  Baucus said.  "But the overriding goal is increasing trade, and we have to pass TPA if we’re going to create a TPP and the European agreement as well."

Never has so much ridden on granting an administration the authority, Baucus said. He called the current U.S. trade agenda the most substantive in the country’s history.

Camp said this week that if "the administration continues to delay its engagement on this politically and economically important issue, it will undermine support for TPP and could delay our ability to conclude TPP."

Levin also said the currency should be included in any fast-track bill but that his focus is on pressing U.S. trade officials to broach the issue in TPP negotiations. 

Meanwhile, the aim of the TPP leaders is to complete a deal by the end of the year, although Froman signaled a willingness to push the deadline. 

“The end of the year is the objective that our leaders have set out. It’s an ambitious objective, and we’re not going to be tied to a deadline at the expense of negotiating a good agreement," he said. 

Beyond the 12-nation TPP, the U.S. has launched negotiations with the European Union in support of another major pact known as the Transatlantic Trade and Investment Partnership that would create the world's largest trading zone. 

The two deals together would cover two-thirds of the world’s economy.

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