US Senate Trade Debate Approaches Critical Vote

21 May 2015

The past week has marked a hectic period in Washington political circles, with US Senate lawmakers putting forward a flurry of amendments to proposed trade legislation ahead of a key vote expected later this week.

Senate Majority Leader Mitch McConnell announced on Tuesday evening that he would be moving to limit debate on the trade bill, setting the stage for a Thursday cloture vote. Once cloture is invoked, the Senate will have up to 30 additional hours to continue debate on the bill. Cloture requires meeting a 60-vote threshold, out of the 100 lawmakers that make up the Senate.

Though the Senate is due to go into recess on 22 May, McConnell has warned that he could keep that chamber in session longer if necessary in order to ensure a vote to pass the trade legislation itself, known as Trade Promotion Authority (TPA).

“The Senate will finish its work on trade this week, and we will remain in session as long as it takes to do so,” McConnell said on Monday in outlining that chamber’s plans for the week.

The Republican senator from Kentucky also criticised the “Far Left’s strategy of wasting time on trade for its own sake,” particularly after the delays seen last week in formally opening debate on the legislation. (See Bridges Weekly, 13 May 2015)

The TPA legislation under consideration sets out US principal negotiating objectives in trade deals, and allows for completed agreements to be submitted to Congress for a straight up-or-down vote, without the possibility of amendment. The previous version of TPA was enacted in 2002 and expired in 2007.

Amendment process

Since senators voted last week to begin debate on TPA, over 150 amendments have been tabled by lawmakers on a broad series of topics.

At press time, votes had been held on a handful of these amendments. These involved an amendment aimed at striking Trade Adjustment Assistance (TAA) – a programme aimed at providing support to domestic workers displaced by trade – from the TPA legislation, as well as an amendment including religious freedom as an overall negotiating objective. The former failed, while the latter was approved.

How many of the various other amendments put forward will come to a vote has been put in question by the planned Thursday cloture vote on the overall TPA bill, with discussions on process still ongoing at the time of this writing.

“While I will be filing cloture on the bill this evening, that’s not the end of the story: the bill managers will continue working together to get more amendments available for a vote before the cloture vote,” McConnell affirmed on Tuesday.

One of the amendments stoking controversy is a proposal to reauthorise the Export-Import Bank – the US’ official federal credit agency for exports, whose mandate expires at the end of June. The amendment’s backers – Maria Cantwell, a Democrat from Washington state, and Lindsey Graham, a Republican from South Carolina – have refused to back a cloture vote without assurances that the bank’s reauthorisation will face a vote.

McConnell, despite having said he is opposed to renewing the bank’s mandate, has pledged that the Export-Import Bank topic will see both floor debate and a vote in his chamber, but not as an amendment to TPA. However, Senate Minority Leader Harry Reid has countered that doing so would be “meaningless” given that a separate vote on the bank would likely need to originate in the House.

Currency provisions?

Another contentious issue is a proposed currency manipulation amendment to TPA, which was introduced by senators Rob Portman, a Republican of Ohio, and Debbie Stabenow, a Democrat of Michigan.

The amendment, known as SA 1299, would making it a principal negotiating objective for the US to include in international trade deals “strong and enforceable rules against exchange rate manipulation that are subject to the same dispute settlement procedures and remedies as other enforceable obligations under the agreement.”

This provision, they said, should not be construed “to restrict the exercise of domestic monetary policy.”

Subsequently, US Treasury Secretary Jack Lew sent a letter to Senate Finance Committee leaders Orrin Hatch and Ron Wyden – the chairperson and ranking member of that panel, respectively – warning that he would recommend to the President to veto legislation that includes a currency amendment, specifically naming SA 1299.

“Enacting a TPA currency discipline that requires an enforceable negotiating objective would likely derail our efforts to complete the [Trans-Pacific Partnership, or TPP, negotiations] and cause us to lose ground on holding countries accountable on currency,” he said, according to a copy of the letter released by the Treasury.

Furthermore, in an apparent response to the claim that the amendment will not impact US policy, he added that such provisions “could put at risk our ability to take steps needed to protect the US economy in the future,” while noting that it could give trading partners the grounds to challenge Washington’s own monetary measures.

An alternative amendment has been offered by Orrin Hatch and Ron Wyden, the Republican chairperson and Democratic ranking member of the Senate Finance Committee, respectively. This proposal would maintain currency as a principal negotiating objective, as in the original TPA draft, but would instead aim at establishing accountability through “enforceable rules, transparency, reporting, monitoring, cooperative mechanisms, or other means.”

This language, Hatch said on Wednesday, would not hurt the 12-country TPP talks.

“If we insert an absolute requirement for enforceable currency rules and required sanctions into the ongoing TPP negotiations, many if not all of our negotiating partners will almost certainly walk away. The Hatch-Wyden Amendment would pose no threat to the TPP negotiations or any other trade deals,” Hatch said. 

Whether such amendments will make it to a vote in the Senate was unclear at the time of this writing, depending largely on Thursday’s cloture vote and related procedures.

Enforcement legislation

Part of the deal struck last week by Senate leadership to allow debate on TPA to begin was giving senators the opportunity to first vote on customs legislation with trade enforcement provisions, including one involving currency manipulation. That bill passed last week and now requires House approval, though whether the currency terms and other enforcement aspects would remain is uncertain.

Hatch and Wyden released a joint statement on Monday with House Ways and Means Committee Chairman Paul Ryan pledging to move the enforcement bill forward quickly.

“In consultation with Speaker [of the House John Boehner] and Leader McConnell, we have agreed to move to reconcile the differences between the two chambers immediately after the House passes its enforcement bill, with the goal of sending legislation to the president by the end of June,” they said.

Shortly thereafter, US President Barack Obama released his own statement welcoming the bill and outlining his hopes for the next steps.

“I am pleased that Chairman Hatch, Senator Wyden, and Chairman Ryan have agreed to swift consideration of the bipartisan Trade Facilitation and Trade Enforcement Act by the end of June. Many of these new tools – such as Super 301, elements of the ENFORCE Act and the Level the Playing Field Act, and constructive tools to address unfair currency practices – would strengthen our ability to both facilitate trade and improve enforcement of the rules,” he said.

The US president also expressed his interest in working with both chambers of Congress to improve “certain provisions” of the bill, without giving further details.

Prospects in the House

Even if the TPA legislation does secure approval in the Senate, it must still undergo House legislative procedures – including the possibility of tacking on amendments to that chamber’s version – and a vote as well.

While that chamber, like the Senate, is also controlled by Republicans, the road ahead is also expected to be rocky, given the deep-seated opposition in the 435-member chamber to the trade legislation – either in principle or in this bill’s approach – by many Democrats.

However, Paul Ryan, who chairs the House Ways and Means Committee, told CNN earlier this week that the trade movement has been gaining momentum in his chamber.

“We will have the votes. We’re doing very well,” he said on Sunday.

ICTSD reporting; “Paul Ryan: Fast-track ‘gaining steam’,” THE HILL, 17 May 2015; “McConnell moves to end debate on trade bill,” THE HILL, 19 May 2015; “McConnell Sets Trade Promotion Authority Endgame in Motion,” ROLL CALL, 19 May 2015; “UPDATE 1-U.S. senators threaten to block trade debate over Ex-Im renewal,” REUTERS, 19 May 2015; “Reid: Obama ‘loves’ the Export-Import Bank,” THE HILL, 19 May 2015.

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