Senate Democrats block trade deal debate

David Shepardson
Detroit News Washington Bureau

Washington — Senate Democrats dealt a blow to President Barack Obama’s bid to win a free trade deal covering 40 percent of the world’s economy when they voted Tuesday to block the Senate from taking up “fast track authority.”

The Senate vote was 52-45, failing to get the 60 votes necessary to open debate on the measure that would allow for an up or down vote without amendments on a pending 12-nation Trans-Pacific Partnership. All Democrats present except Sen. Tom Carper, D-Delaware, voted against the measure.

Republicans accused Democrats of throwing Obama “under the bus,” while pro-trade Democrats said they would work with Republicans to reach a deal to open debate. Many Democrats said they were blocking the Senate from taking up the bill because Sen. Majority Leader Mitch McConnell, R-Kentucky, was only proposing debating two of four trade bills passed last month.

Sen. Ron Wyden, D-Washington, said one of those bills not brought up by McConnell would block U.S. candymakers from importing cocoa made by child laborers in Africa. The other bills approved by the Senate Finance Committee last month would allow the U.S. to impose customs penalities on countries that manipulate their currency with nearly half of Republicans in support.

Addressing currency manipulation is a key priority of U.S. automakers and many in Congress, especially from states with heavy U.S. auto industry presence. But Republicans and the Obama administration think that would be a poison pill that could kill the trade effort.

“We want to see the issues debated,” said Ford vice president Stephen Biegun, who heads trade policy for the Dearborn automaker. Tuesday’s vote is a boost for automakers who are pressing for more action on currency. He said Ford can compete with automakers but not “with the central bank of Japan,” and he thinks a majority of both houses are in favor of a tough stance on currency manipulation.

McConnell called the vote “pretty shocking” and said the issue is one where Republicans and Obama strongly agree. “This doesn’t have to be the end of the story,” McConnell said on the Senate floor.

Sen. John Thune, R-South Dakota, said Senate Democrats “are throwing their own president under the bus.” Sen. John Cornyn, R-Texas, said it would be up to the Obama administration to prod reluctant Democrats demonstrate his “clout.”

But Sen. Sherrod Brown, D-Ohio, said Obama has made the issue more “personal” than necessary than rejecting arguments made by opponents as not serious. Brown said Obama had been “disrespectful” to Sen. Elizabeth Warren, D-Mass., one of the leading critics of the deal.

Obama suggested liberal critics don’t know what they are taking about, Brown said. “‘We’re fighting the last war’ — a number of those phrases he used, I assume he wished he hadn’t said them,” Brown said.

Sen. Charles Schumer, D-New York, said the two bills left behind have critical worker protections needed to move forward. He said the failure would leave workers “twisting in the wind.” He rejected arguments made by Obama that adding currency could harm the ability of the Federal Reserve to intervene in a U.S. financial crisis.

Sen. Chris Coons, D-Del., said the vote is not a “death knell” for fast-track but a “pretty strong warning shot” that the bills on worker provisions must more ahead.

It’s not clear now how or when the Senate will move forward. Congress is set to go on vacation next Thursday for the 10-day Memorial Day recess.

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.

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 on Monday. They both were among Democrats who voted against fast track authority.

“I am very disappointed that this fast track authority does not contain robust enforcement measures that will crack down on currency manipulation or unfair trade and labor practices. Much more needs to be done to restore balance to our trade agreements,” Peters said.

Rep. Sander Levin, D-Royal Oak, the top Democrat on trade issues in the House, said the administration has ignored critics “and not enough has been done to build broad bipartisan support for the potential agreement — and for U.S. trade policy.”

AFL-CIO President Rich Trumka said the vote “sends a message loud and clear. If Congress is serious about creating jobs, reviving U.S. manufacturing, and raising wages, it needs to use its leverage to reshape the terms of the Trans-Pacific Partnership.”

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.

DShepardson@detroitnews.com