President Obama lost the first skirmish Wednesday in his push for fast-track powers to negotiate trade deals with Asian and Pacific nations when the Senate Finance Committee voted for tougher penalties on countries deemed guilty of manipulating their currencies — a move the administration says could threaten the negotiations.
Across the Capitol in the House, Democrats lectured Mr. Obama’s top lieutenants, saying they don’t trust the administration to follow through on his lofty promises of being able to win a fairer playing field while also agreeing to give foreign countries better access to U.S. markets.
“If you want us to support this piece of legislation, we need more than hope,” said Rep. John Lewis, a Georgia Democrat viewed by many in his party as a hefty moral voice because of his involvement in the civil rights movement.
It was an ignominious start for Mr. Obama as he seeks to prove he can convince Democrats to join a free-trade coalition with Republicans.
Sen. Elizabeth Warren, Massachusetts Democrat, shot back at Mr. Obama a day after he said she was “wrong on this.” Ms. Warren said if the trade deal the president is negotiating with Pacific nations is as good for Americans as the president says, he should make the agreement public now.
And a coalition of liberal groups announced a seven-figure ad campaign to rally opposition to Mr. Obama over the fast-track powers he’s requesting, saying it “makes it easier to ship our jobs overseas, lower wages and undercut our environmental and food safety standards.”
Still, the fast-track bill, known officially as Trade Promotion Authority or TPA, was headed toward passage in the Senate committee late Wednesday night, along with a package of three other bills, including assistance to workers displaced by free trade and another to beef up U.S. enforcement of existing trade deals.
That last bill now includes the currency provisions, which passed on an 18-8 vote.
Sponsored by Sen. Charles E. Schumer of New York, Senate Democrats leader-in-waiting, the currency amendment would force the Commerce Department to investigate all potential cases of manipulation, taking away some of the discretion that both Republican and Democratic administrations have used to avoid the thorny issue. If the department determines manipulation has occurred, it is required to impose penalties.
“It’s long past due for the United States government to take on the world’s worst currency manipulators and level the playing field for American workers and companies,” Mr. Schumer said.
Hours later, however, the committee defeated an effort to add the currency provisions into the fast-track legislation itself, after the administration said doing so would “poison” the negotiations with 11 Asian nations, known as the Trans-Pacific Partnership (TPP), that the administration is trying to conclude.
“Seeking enforceable currency provisions would likely derail the conclusion of the TPP given the deep reservations held by our trading partners,” Treasury Secretary Jacob Lew said in a letter to Congress on Tuesday. “As such, any amendment to TPA legislation requiring that the administration only seek enforceable currency provisions as a principal negotiating objective would undermine our ability to successfully conclude a TPP negotiation.”
Even though the effort to add currency penalties into the fast-track bill failed, it’s likely to be a part of the mix as the legislation moves through Congress.
Sen. Rob Portman, an Ohio Republican who served as the country’s top trade official under President George W. Bush, said adding the currency provisions into the bill could even be the key to winning enough votes to pass TPA.
Republicans generally support the TPA fast-track powers, but say there aren’t enough GOP votes to pass the legislation, so Mr. Obama will have to deliver Democrats.
While some have stepped forward, opposition is running high, and on Wednesday House Minority Leader Nancy Pelosi added her voice to the critics, saying she’ll back an effort to rein in Mr. Obama’s negotiating latitude and demand he take a tougher stand on key areas such as labor unionists’ rights and currency manipulation.
Mr. Lew and two other Cabinet officials, Agriculture Secretary Tom Vilsack and Commerce Secretary Penny Pritzker, tried to make their case to House Democrats during a hearing before the Ways and Means Committee, saying all that’s at stake right now is the TPA, which is the framework for setting up future trade deals.
The officials said most of the objections seemed to be looking ahead at an eventual Pacific trade deal — but they said Congress will get another crack at that, if a deal is reached.
“Ultimately we have to bring any agreement back to this Congress and we need to be able to negotiate with the belief we can get Congress to approve any agreement,” Mr. Lew said.
Democrats and some Republicans have complained that the administration has already done much of the negotiating for the TPP in private, but has kept the details secret.
“If most of the trade deal is good for the American economy, but there’s a provision hidden in the fine print that could help multinational corporations ship American jobs overseas or allow for watering down of environmental or labor rules, fast track would mean that Congress couldn’t write an amendment to fix it. It’s all or nothing,” Ms. Warren wrote in a blog post defending her opposition.
But the administration officials said under the fast-track bill, they will have to share details with Congress during the rest of the negotiations, and will have to release all of the agreements once they are done, so the public will have a chance to evaluate them.
Republicans, stung by repeated fights with Mr. Obama over his executive actions, which the GOP believes have stretched or broken federal laws, questioned whether they could trust the president to follow the letter of the TPA.
“We are committed to following the law,” Mr. Lew replied.
He also batted away Democratic fears that countries such as Vietnam, which is involved in the TPP negotiations, have a poor record on labor union rights. Mr. Lew said just getting other countries to consider stiffer labor protections, which has been part of the talks, was “a huge step.”
“Bringing other countries from a very low level up is going to make it more competitive for American businesses,” he said.
• Dave Boyer and David Sherfinski contributed to this article.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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