US Senate Approves Fast Track Authority for OK to TPP

The US Senate approved legislation to renew Trade Promotion Authority (TPA) for President Barack Obama last Friday, after weeks of political wrangling and heated debate. The legislative fight is now expected to move to the House of Representatives, where the outcome is still less than certain.

Senators voted 62-37 in favour of the legislation last week, having cleared a key procedural vote the day before to invoke cloture and limit debate on the bill. Of the 62 votes in favour, 14 were Democrats, while 48 were Republicans.

The TPA legislation sets out Washington’s principal negotiating objectives in trade deals, while allowing for completed agreements to be submitted to Congress for a straight up-or-down vote without the possibility of amendment. The previous version of TPA was enacted in 2002 and expired in 2007.

“Today’s bipartisan Senate vote is an important step toward ensuring the United States can negotiate and enforce strong, high-standards trade agreements,” said Obama following news of the Senate vote. “If done right, these agreements are vital to expanding opportunities for the middle class, levelling the playing field for American workers, and establishing rules for the global economy that help our businesses grow and hire by selling goods Made in America to the rest of the world.”

Currency in TPA

One of the major fights before Friday’s vote had been how currency would be treated within TPA as a negotiating objective for international trade deals.

Competing amendments had been filed by lawmakers on the subject, with one aiming to making it a principal negotiating object for the US to include in international trade deals “strong and enforceable rules against exchange rate manipulation that are subject to the same dispute settlement procedures and remedies as other enforceable obligations under the agreement.”

Vote on Ex-Im bank to be treated separately

Another issue that threatened to slow down, or even derail, the TPA approval process in the Senate was a dispute over how to proceed with legislation to renew the mandate of the Export-Import Bank, which is the US’ official federal credit agency for exports.

TPP implications

The pace of the TPA approval process has been watched closely by members of the Trans-Pacific Partnership Agreement, a 12-country trade negotiation that, if completed, would cover over 40 percent of global GDP.

Successful passage of trade legislation in both chambers of the US Congress has been deemed by both officials and analysts as a necessary pre-condition before TPP countries can secure a final deal.

A ministerial-level gathering of officials from TPP member countries had been tentatively planned for this month in Guam, only to be postponed after many ministers reportedly expressed hesitation over meeting without TPA in place. Chief negotiators did meet in Guam over the past several days to advance the talks, however.