Senate Trade Vote Fails, Lawmakers Show No Immediate Signs of Reconciliation

Senate leadership hasn’t yet scheduled another vote and there appears no clear plan forward. Democrats continue to push Majority Leader Mitch McConnell, R-Ky., to roll all four trade bills into one before they endorse the move to open debate on trade legislation. Trade enforcement provisions, which are included in Customs Reauthorization, are an indispensible part of a legislative approach to trade, Democrats have said repeatedly over recent days.

Senate Finance Chairman Orrin Hatch, R-Utah, predicted on May 13 Democrats will relent in their demands, and ultimately rally behind President Barack Obama’s drive to lock down Trade Promotion Authority. “I think they know that was not a good thing for them yesterday; it certainly was not a good thing for the president,” said Hatch in an interview. “They’re going to have to relent or there won’t be a bill.” Hatch declined to comment on a specific date for another vote, saying it potentially wouldn’t happen on May 13.

Following the May 12 vote, Democrats renewed threats to obstruct trade legislation if the bills aren't merged. “This is a bipartisan package that both sides of the Finance Committee supported strongly with the understanding that its component parts would be linked together. This stool cannot stand with two legs,” said Finance ranking member Ron Wyden, D-Ore., on the Senate floor. “The Senate should not begin debate until there’s a clear path forward for each of these four bills.”

Hatch and Wyden, along with Ways and Means Chairman Paul Ryan, R-Wis., agreed in April to pass TPA and Trade Adjustment Assistance on the same day (see 1504170024), but the lawmakers didn’t publicly pledge similar assurances with Customs Reauthorization and the preference package, which includes renewals for the African Growth and Opportunity Act, the Generalized System of Preferences and two Haiti tariff elimination programs.

On May 13, said Wyden’s insistence on merging the bills is “contrary” to the agreement struck between the lawmakers in April. “He has various pressures on him,” said Hatch. “I intend to work with him and hopefully we’ll get him back on board. I think we will.” After the vote, Hatch delivered stinging criticism on the Senate floor to his Democratic colleagues. There are “more than a few [Democrats] who should know better,” he said in the remarks.

A number of lawmakers, including Sen. John Thune, R-S.D., voiced optimism that a deal can still be reached on trade legislation in the coming days. “Senate Democrats have chosen to block their own president’s agenda, uniting against one of his top policy priorities while, so far, President Obama has failed to adequately make his case among his own party,” said Thune, a member of Senate leadership, in a statement after the vote. “This is a setback, but I am hopeful that the Senate can find a path forward to pass this legislation, which is essential to securing free and fair trade agreements and providing access to new markets for American farmers, ranchers, and manufacturers.”

McConnell railed against Senate Minority Leader Harry Reid, D-Nev., in remarks on May 13, but he also signaled a willingness to collaborate across the aisle. The Senate will not roll customs into the package, said McConnell again on the Senate floor. "We certainly won’t be doing that," said McConnell. "I understand it may be uncomfortable for our Democrat colleagues to cross loud factions in their party, but Republicans proved yesterday that it’s possible to put good policy over easy politics." Both McConnell and Hatch said the currency provision in Customs Reauthorization would torpedo the whole package, particularly in the House. The Senate Finance Committee approved the Currency Undervaluation Investigation Act, S-433, as part of the customs legislation during the late April markup (see 1504230001).

Trade supporters are now in "panic mode," despite the measured comments from both sides, said one lobbyist close to the debate. Lawmakers now have several options at their disposal, the lobbyist said. Lawmakers may weaken the currency provision, spearheaded by Sen. Chuck Schumer, D-N.Y., during the Finance markup, or Democrats may agree to withdraw the currency provision from the customs bill altogether. The White House may also agree to support the currency bill, but in that event the House will still likely oppose Customs Reauthorization. White House officials have repeatedly voiced opposition to currency legislation.

Sen. Patty Murray, D-Wash., said negotiations on Capitol Hill are ongoing. "There's a number of discussions moving and I'm hopeful we can move forward." Obama hosted 10 Democrats, including Murray, at the White House on May 12 to pressure support for trade, the White House said in release. "Members in attendance reiterated their support for TPA legislation that will pave the way for high-standard trade agreements that support good American jobs, protect our workers and environment, and ensure that the United States, and not countries like China, write the rules for the global economy," said a White House statement.

Meanwhile, industry and business groups voiced disapproval with the Democratic opposition in the May 12 vote. The National Retail Federation, U.S. Chamber of Commerce, Caterpillar and other free trade advocates all urged lawmakers to reconcile differences and advance trade legislation. Unions, including the AFl-CIO, applauded the defeat. "This vote sends a message loud and clear," said AFL-CIO President Richard Trumka in a statement. "If Congress is serious about creating jobs, reviving U.S. manufacturing, and raising wages, it needs to use its leverage to reshape the terms of the Trans-Pacific Partnership."