Senate to vote on whether to open fast track debate

David Shepardson
Detroit News Washington Bureau

Washington — The U.S. Senate is set to hold a test vote Tuesday on a bill to give the Obama administration “fast track authority” to get an up or down vote on an Asia Pacific free trade deal that would account for 40 percent of the world’s economy.

But some opponents think that it doesn’t have the votes and Sen. Majority Leader Mitch McConnell, R-Kentucky, could delay the vote. The administration and Republican senators would like the Senate to approve the measure before it leaves next week for the week-long Memorial Day recess.

“It’s incredibly important for American workers that we pass this bill. Without it, foreign countries will continue to be able to discriminate against American products and American produce, while we have some of the lowest duties in the world,” McConnell said Monday. “We need strong and fair trade legislation that expands Congress’ oversight over the administration and sets clear rules and standards for its trade negotiators.”

For more than seven years, the U.S., Japan, Mexico, Canada and eight other nations have been negotiating the Trans-Pacific Partnership that would create a free-trade zone comprising 40 percent of the world’s economy; Japan joined the talks in 2013. Australia, Brunei, Chile, New Zealand, Malaysia, Peru, Singapore and Vietnam are also part of the negotiations.

The vote Tuesday is to open debate on the fast track measure that is opposed by both of Michigan’s senators in its current form without currency provisions sought by U.S. automakers.

Sens. Debbie Stabenow, D-Lansing and Gary Peters, D-Bloomfield Township, were among 14 Senate Democrats who raised concerns about labor standards in the Trans-Pacific Partnership. “Americans cannot compete against workers in these countries where fundamental worker rights are not protected,” they wrote, citing Mexico, Vietnam, Malaysia and Brunei.

President Barack Obama on Friday again dismissed arguments made by U.S. automakers that a trade deal should include enforceable provisions that would bar countries from manipulating their currency. He said the U.S. has pressured China “hard” to let its currency value rise and he said the Chinese currency has risen by 30 percent since he took office.

“There’s more work to do but we want to make sure that we do that right because when you are talking about currency — we’ve got to make sure that other countries don’t retaliate by in some ways accusing our Federal Reserve bank, for example, of manipulating our currency when they are just trying to lower the unemployment rate or deal with a financial crisis,” he told Yahoo News.

Obama said there is “no logic” to support opposition to an agreement by Democrats.

Over objections of U.S. automakers, House and Senate panels last month approved fast track legislation to allow President Barack Obama to get an up-or-down vote, without amendments. In its current form, the Trans-Pacific Partnership does not include provisions the auto companies seek to bar countries from intervening to weaken the value of their currency.

A strong U.S. dollar against a weaker local currency — especially one that is artificially weak due to government manipulation — means foreign vehicles are cheaper here, and U.S. vehicles are more expensive there.

Rep. Sander Levin, D-Royal Oak, and Sen. Sherrod Brown, D-Ohio will hold an event on Capitol Hill on Tuesday with AFL-CIO President Richard Trumka and a top Ford trade official, Steve Biegun, to talk about the fast track measure.

The pact eventually would end America’s 25 percent tariffs on imported light trucks and 2.5 percent tariffs on cars and auto parts. The tariff has been in place for more than 50 years.

Those tariffs, especially the truck tax, have forced foreign automakers to build truck and SUV plants in the United States and helped keep some would-be competitors out of the truck market that is dominated by Detroit’s Big Three. The U.S. and Japan previously have agreed that the tariffs will remain in place for the “longest period” of any phaseout of tariffs in the agreement.

The administration says currency issues can be dealt with in other international forums, not trade deals.

American automakers fear that if Japan intervenes to weaken its currency, its automakers eventually will be able to dramatically undercut them, especially when U.S. tariffs are phased out. Automakers want the tariffs kept in place for at least 25 years or more, while Japan wants tariffs on auto parts dropped immediately.

Japan imports very few U.S. cars, even though it has no tariffs on U.S. vehicles. U.S. automakers have complained for years of other barriers to U.S. vehicles, while Japanese automakers argue U.S. companies haven’t made enough of an effort to sell vehicles in Japan. Japanese automakers note they have spent tens of billions of dollars and employ thousands of Americans building cars and trucks in the United States — something U.S. companies don’t do in Japan.

DShepardson@detroitnews.com