There’s no shortage of liberal opposition to President Barack Obama on the Trans-Pacific Partnership, but a more serious threat to the administration’s pro-trade alliance with Republicans might come from those who want to tackle the perpetually thorny issue of currency manipulation.
Sen. Rob Portman intends to bring an amendment to the floor as part of the “fast-track” debate that would make it a “principal negotiating objective” under TPA to create enforceable rules to combat unfair currency practices. It was voted down at the committee level, 11-15.
As a former U.S. trade representative under President George W. Bush, the Ohio Republican is among the Senate’s most experienced voices on trade policy, and he has consistently backed free trade. But while his stand is to be expected of a senator representing a large manufacturing state, it has put him at odds with his GOP allies on many other issues, as well as with the Obama Treasury Department.
Treasury Secretary Jacob J. Lew, in an April 21 letter to Finance Chairman Orrin G. Hatch, R-Utah, warned that including such language in the bill to revive Trade Promotion Authority would be problematic to the Asia-Pacific free trade agreement known as the TPP.
“We have a serious concern that in any trade negotiation other countries would insist that an enforceable currency provision be designed so it could be used to challenge legitimate U.S. monetary policy, an outcome we would find unacceptable. Seeking enforceable currency provisions would likely derail the conclusion of the TPP given the deep reservations held by our trading partners,” Lew wrote. “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.”
Responding to critics at the markup, Portman has argued stronger currency protections are essential.
“This is not about derailing anything or making it harder to pass anything, it’s about how to make it easier. It’s about how to be able to say with a straight face to the people who we’re hired by, ‘This is going to be good for you, for your families, for your ability to get ahead in life,'” Portman said.
And Portman’s many allies include Sen. Charles E. Schumer, the powerful New York Democrat.
Schumer, who appears a lock to become the Democrats’ next party leader in the Senate, was among the bipartisan supporters of Portman’s amendment, which could resurface on the floor as early as next week. He helped lead past efforts to crack down on currency actions by China, including a 2011 effort that received 63 “yes” votes.
“Here, I would just argue to my colleagues that we have to change the way we do trade agreements. I believe that we should do trade agreements, and I certainly believe in the administration’s goal of weening these nations away from China and putting them more in … our economic world,” Schumer said. “That’s a very appealing rationale, but it can’t come at the expense of doing things that are so untoward and so harmful to American workers.”
Schumer last week at the Finance Committee markup won approval, 18-8, of an amendment to block the Commerce Department from avoiding currency manipulation cases. While Schumer’s offering came on a sidecar to the main TPA legislation, Hatch nonetheless said Schumer was able to “smother” him on the currency issue.
Schumer has long been a leader of a bipartisan group championing legislation to target currency manipulation, with particularly biting criticism of China, and he might be expected to throw significant weight behind efforts to force the administration’s hand in this case.
Obama has been increasingly vocal in responding to fellow Democrats critical of his trade agenda, including during an MSNBC appearance, and there’s expected to be a full push against currency language or anything else that could hamstring trade deal efforts.
In a weekend letter, Democratic Sens. Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts responded by pushing back against Obama calling some critiques “dishonest.” But that wasn’t their only message for the president.
“Fast track, as currently written, would preclude Congress from amending or filibustering any trade agreement to this Congress or any future Congress — potentially through 2021. If passed, this legislation would grease the skids for approval of any additional trade agreements that might be advanced through the next two presidencies,” Brown and Warren wrote. “While we hope that future Presidents and future Congresses share our values, no one knows who will be using this authority once you leave office.”
The president used his weekly address to discuss the issue.
“If I didn’t think this was the right thing to do for working families, I wouldn’t be fighting for it. We’ve spent the past six years trying to rescue the economy, retool the auto industry, and revitalize American manufacturing. And if there were ever an agreement that undercut that progress, or hurt those workers, I wouldn’t sign it,” Obama said. “My entire presidency is about helping working families recover from recession and rebuild for the future.”
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