Congressional leaders reached agreement Thursday on a bipartisan bill that should ease passage of a sweeping Pacific Rim trade deal, giving a boost to one of President Obama’s top foreign policy goals but putting him in an unusual alliance with Republicans against many in his own party.
The so-called fast-track legislation was seen as a necessary step for the White House to bring to a conclusion the long-delayed Trans-Pacific Partnership.
Proponents said the 12-nation trade deal would deliver significant benefits by opening markets and establishing rules on commerce and investment that will help American workers and an array of U.S. industries, including West Coast ports, entertainment companies and drug makers.
The Trans-Pacific Partnership is the economic centerpiece of Obama’s policy shift toward Asia. He has staked his legacy as the self-proclaimed “first Pacific president” on completing the deal, even at the expense of alienating many Democrats who remain deeply suspicious of claims that free-trade deals are good for American workers.
While Obama and many businesses lauded the agreement announced Thursday by key House and Senate leaders, Democratic lawmakers, trade unions and environmental groups responded with a flurry of statements and news conferences denouncing the legislation.
The AFL-CIO said it would launch a large-scale campaign to pressure more than 50 Democratic members of Congress who may be on the fence to vote against the bill.
Fast-track authority would let Obama strike a trade agreement with 11 other Pacific Rim countries, including Japan, Canada and Mexico, with the assurance that Congress must approve or reject it with no amendments. The Trans-Pacific Partnership negotiations are in the last stages, but Japan and some other countries have been reluctant to show all their cards, concerned that Congress might alter the final agreement.
The push to pass the bill will trigger a high-stakes political battle. Republican leaders generally favor speeding up the path to a trade agreement and have highlighted the Trans-Pacific Partnership as a rare issue of agreement with the Obama administration.
But the president will need to overcome resistance from many Democrats worried about the trade pact’s impact on U.S. jobs. Some tea party Republicans, particularly in the House, also complain the president has already exceeded his executive authority and should not be given new powers.
The issue also is likely to play a role in the 2016 presidential campaign, particularly for Democratic front-runner Hillary Rodham Clinton. She will face pressure from unions and progressive Democrats to oppose fast-track authority and the agreement, though it was her husband, former President Bill Clinton, who oversaw passage of the last big trade pact, the North American Free Trade Agreement.
Obama vowed to take congressional concerns into consideration, but stressed that the trade pact was critical to boosting U.S. exports and responding to the economic threat from China, which would not be part of the agreement. The pact, one of the largest in history, would join countries that make up 40% of the world’s gross domestic product.
“It’s no secret that past trade deals haven’t always lived up to their promise, and that’s why I will only sign my name to an agreement that helps ordinary Americans get ahead,” Obama said Thursday.
“At the same time, at a moment when 95% of our potential customers live outside our borders, we must make sure that we, and not countries like China, are writing the rules for the global economy,” he said.
California farmers, devastated by the region’s relentless drought, could be among the biggest beneficiaries of the agreement.
Joel Nelsen, president of California Citrus Mutual, said an agreement could provide much-needed relief by reducing steep tariffs growers face when exporting to Asia, particularly Japan. About 25% of California’s $2.4-billion citrus production is shipped overseas, much of it to Asia, he said.
“It gives us a fighting chance to sustain sufficient revenue per acre to pay for our higher water,” Nelsen said. “Citrus Mutual has always been supportive of the effort, as long as it addresses the imbalance in the tariff rates, and we believe that’s what’s going to happen.”
Democratic lawmakers and opponents of fast-track authority complained that Trans-Pacific Partnership negotiations have been conducted in secrecy and said it would be a mistake for Congress to give up its ability to change elements of an agreement before voting on it. Liberal Democrats such as Sen. Elizabeth Warren (D-Mass.) are expected to launch a fierce legislative push to block the bill.
Opponents also warn the pact will hurt the environment, kill U.S. jobs and benefit mostly large multinational corporations. Hollywood has been lobbying hard for the deal, which promises to bring tighter copyright protections for movie and music firms.
Among critics of the proposed agreement is the International Longshore and Warehouse Union, which represents workers at the ports of Los Angeles and Long Beach.
“The ILWU handles containers that represent millions of outsourced and offshore industrial jobs,” said Craig Merrilees, an ILWU spokesman. The agreement is “a grab-bag of goodies for corporate America.”
Thursday’s compromise, aimed at getting enough Senate Democrats to break with their party to support the deal, would require White House trade officials to provide Congress with greater access to the terms of the deal and make updates and full details available to the public before it is signed.
The bill also includes a mechanism that would essentially revoke fast-track authority should U.S. trade negotiators fail to meet certain objectives, including promoting human rights, improving labor conditions and safeguarding the environment, said Sen. Ron Wyden (D-Ore.), the ranking Democrat on the Senate Finance Committee.
Wyden, whose support for fast-track authority was seen as key to bringing along other Democrats, struck the deal with Sen. Orrin G. Hatch (R-Utah), the Senate panel’s chairman, and Rep. Paul D. Ryan (R-Wis.), head of the House Ways and Means Committee.
In announcing the bill, the three lawmakers issued a joint statement saying that the legislation “establishes concrete rules for international trade negotiations to help the United States deliver strong, high-standard trade agreements that will boost American exports and create new economic opportunities and better jobs for American workers, manufacturers, farmers, ranchers and entrepreneurs.”
Democratic lawmakers, however, said the measure — introduced in the Senate and to be followed in the House — did not include any language to prevent currency manipulation and was no better overall than the previous fast-track legislation that expired in 2007.
“It’s worse than the [previous] version,” said Rep. Brad Sherman (D-Sherman Oaks), who called the legislation a “sellout.”
“Those are noble goals that won’t be enforced in any way,” he said of the provisions on human rights, which were not in the prior fast-track authority.
A separate but similar House version of the legislation could face a tougher test as the ranking member on the House Ways and Means Committee, Sander Levin (D-Mich.), and other top Democratic lawmakers are opposed to fast-track. Sherman said he expected House Republicans to try to win a few more Democrats by tacking on sweeteners, like aid for Africa.
Times staff writer Stuart Pfeifer in Los Angeles contributed this report.