WASHINGTON-As two key Congressional committees gear up to consider the presidential Trade Promotion Authority bill this week, President Obama will be working overtime to convince not only members of his own party but also the American public that trade can help boost the U.S. economy.
The Senate Finance Committee and House Ways and Means Committee have scheduled hearings on TPA and trade on Tuesday and Wednesday, respectively.
After months of negotiations, a bipartisan trio of senior lawmakers introduced TPA legislation in the Senate and House on Thursday, advancing the trade agenda but also setting up a difficult political fight over trade policy in the coming months.
Under TPA, Congress can only vote up or down on a trade agreement but lawmakers also help set the objectives for trade agreements being negotiated by any administration.
TPA is seen as the linchpin to completing trade agreements, particularly the Trans-Pacific Partnership pact being negotiated between the U.S. and 11 other countries, which the administration has said it is close to completing. The presidential authority gives the administration leverage with trading partners who know they can make their best offers without having to worry that Congress will change the final deal.
Obama, who has made trade a cornerstone of his presidency, has faced mounting opposition from some Democrats in both chambers for months on TPA and on the TPP agreement in particular.
But the compromise deal on TPA reached between Senate Finance Committee chairman Orrin Hatch (R., Utah),Sen. Ron Wyden (D., Ore.), the ranking Democrat, and House Ways and Means chairman Paul Ryan (R., Wis.)was widely seen as a positive among business groups for kick-starting Obama’s trade agenda. Fashion industry trade groups were pleased to see that TPA legislation paved the way for the introduction of a separate trade package that would extend the African Growth & Opportunity Act for a decade, renew the Generalized System of Preference program that expired in July 2013 and extend trade benefits in the HOPE and HELP programs for products from Haiti through September 20205.
The battle on getting TPA through Congress will begin this week. Negotiations on TPP are still on-going and have not yet been completed.
The Senate Finance committee will host two opposing groups at its hearing on Tuesday: Thomas Donahue, president and chief executive officer of the U.S. Chamber of Commerce, and Richard Trumka, president of the AFL-CIO.
The AFL-CIO held a “day of action” against TPA, formerly known as “fast-track” authority on Saturday in conjunction with events around the world.
Trumka has said that TPA will “speed through corporate-driven trade deals” that devastate communities and lead to job losses and lower wages.
Obama outlined the benefits of trade and addressed divisiveness in the Democratic party as well as union opposition on Friday when asked a question about the new TPA bill at a press conference with Italian Prime Minister Matteo Renzi.
Obama argued that there is a clear distinction between TPA and trade agreements, such as TPP. He said TPA is not a trade agreement, but a framework that can move trade agreements through Congress faster and also one that, for the first time, includes requirements for enforceable labor standards, environmental provisions and human rights. It has also been given to every president in the postwar era, except former President Richard Nixon, Obama noted.
“The politics around trade has always been tough, particularly in the Democratic Party, because people have memories of outsourcing and job loss,” Obama said. “The point I’ve made to my labor friends and my progressive friends is that companies that are looking for just low-cost labor, they’ve already left. We’re already at a disadvantage right now. And the trade agreement [TPP] I’m proposing would actually strengthen our ability to force other markets to open and strengthen our position compared to where we are right now.”
Obama said opposition to TPP is “essentially a ratification of the status quo, where a lot of folks are selling here, but we’re not selling there.”
He pointed to hard-won trade fights in Congress such as trade deals with South Korea, Columbia and Panama.
“It didn’t divide the Democratic party,” Obama said. “There’s going to be a set of Democratic senators and House members who traditionally have just, on principle, opposed trade because the unions, on principle, regardless of what the provisions are, are opposed to trade. “And then there are others who, like me, believe that we cannot stop a global economy at our shores. We’ve got to be in there and compete.”