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The Peninsula

Roller Coaster Ride of Trade Politics – Part III

Published June 26, 2015
Category: South Korea

This is the third in a three part series looking at the ongoing trade debate in the United States and its impact on Korea. Part one can be found here and part two here.

By Phil Eskeland

This post was updated on July 24, 2015.

This has been an incredibly fascinating past several weeks to anyone who has followed the politics of trade policy in the U.S. Congress.  This was not your average roller coaster ride – it was multi-dimensional experience where Congress went forwards and backwards, even a couple of 360 degree reversals, only to come out at the end in passing the original goal of Trade Promotion Authority (TPA) for the President.  But how Congress reached this goal was like seeing sausages being made (apologies to Otto von Bismarck).

Last May, the Senate initially could not overcome a procedural hurdle to bring up the Trade Act of 2015.  But within 24 hours, an agreement was reached on how to proceed and the Senate passed TPA by a comfortable majority of 62 to 37, with the support from 14 pro-trade Democrat Senators.  The Trade Act of 2015 also included a provision to reauthorize the Trade Adjustment Assistance (TAA) program, which provides federal job retraining assistance to workers negatively affected by imports.

However, when the combined TPA/TAA bill went to the House of Representatives for consideration, a different fate awaited the Trade Act of 2015.  The Republican leadership decided to split the bill in half and vote on each section separately because TAA is a more contentious issue within the GOP than TPA.  Then if both sections passed, the bill would automatically be recombined and sent to the President for his signature.  But before the Republican leadership could proceed with this plan, the House needed to pass a resolution or a Rule to permit this legislative strategy to take place.  Usually, a Rule passes on a straight party-line vote.  With Republicans controlling 236 seats (vs. 188 for Democrats), the Rule to consider the Trade Act of 2015 should have easily passed.  However, as portend of the next series of votes, the Rule barely passed the House and necessitated 8 pro-trade Democrats to cross party lines to support the Rule.  At the end of the day, most House Democrats decided to join most House Republicans in opposing TAA but for completely different reasons.  Most House Democrats opposed TAA as a tactical tool to halt TPA.  But despite this defeat, the House Republican leadership wisely decided to proceed with the next vote on TPA itself, which passed by a narrow margin of 216 to 211 with the support of 28 House Democrats.  However, without these courageous Democrat Members – Representatives Earl Blumenauer (OR-3rd); Gerald Connolly (VA-11th); Jim Cooper (TN-5th); Henry Cuellar (TX-28th); John Delaney (MD-6th); Eddie Bernice Johnson (TX-30th); Ron Kind (WI-3rd); and Rick Larsen (WA-2nd) – supporting the initial Rule to allow the entire House to debate TPA, the final vote on TPA itself would not have happened.

After the temporary set-back, the Republican leaders in the House and Senate got together to devise a strategy on how to advance TPA.  U.S. leadership around the world was taking a shellacking after this defeat.  While no path was easy, the most effective route was to convince the U.S. Senate to hold a re-vote on TPA.  However, because TAA was now no longer an integral part of Trade Act of 2015, it was not a guarantee that the 14 Democrat Senators who supported TPA in the past would do so again.  Thus, the operable word over the past two weeks was trust.  Both House Speaker John Boehner and Senate Majority Leader Mitch McConnell made a rare joint statement pledging that TPA and TAA would get votes in both the House and Senate so that these bills could both sent to the President’s desk for his signature.  So, based on this promise, pro-trade Democrats in the Senate once again voted for “cloture” (60 votes are needed in the Senate in order to bring up any legislation for debate and amendments).  Then, shortly thereafter, the newly renamed TPA bill – the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 – passed the Senate by a vote of 60 to 38.  As an additional sweetener, U.S. trade enforcement laws were amended in a separate bill that extended certain U.S. trade preference measures, to combat alleged unfair trade practices, such as provisions to counteract foreign government subsidies of exports.

However, the last twist in this legislative roller coaster ride in the Senate was the decision of presidential candidate Senator Ted Cruz of Texas to switch his vote to oppose both the TPA cloture motion and TPA itself, which gave Senate Majority Leader McConnell no margin for error.  He could not afford to lose any additional votes on either side of the aisle.  In addition, one of the fiscal conservative, small government groups – Heritage Action – also decided to oppose TPA even though other like-minded groups, such as Club for Growth, urged Senators to support the legislation.  Despite the switch by Senator Cruz, the cloture motion passed – but barely – by a vote of 60 to 37.

Once again, the trade politics drama moved to the House.  Now that the Senate passed the House version of the stand-alone TPA bill, sending it on its way to the President’s desk for his signature, would House Democrats still oppose TAA on tactical grounds?  President Obama made it clear that he wanted to sign both provisions into law, but some Democrats were toying with the idea of still opposing TAA to force the President into a decision to sign or veto TPA if that was the only bill that reached his desk.  Further complicating matters for House Democrats, the TAA reauthorization was now attached to legislation to renew various U.S. trade preference laws, including those that benefit Africa.  This bill – the Trade Preferences Extension Act of 2015 – eventually passed the Senate by a wide bipartisan margin of 76 to 22, with the support of many Senate Democrats who strongly opposed TPA, including Senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio.

So, for the final “drop” on this interesting roller coaster ride, most House Democrats decided not to oppose the Trade Preferences Extension Act of 2015 as a tactical tool to stop TPA.  Their temporary pyrrhic victory in halting TPA was overcome less than two weeks later.  On June 25, 2015, the House passed the Trade Preferences Extension Act of 2015 by another wide bipartisan margin of 286 to 138.  Almost every House Democrat voted for this bill while the House GOP was almost evenly split because of the TAA provision.  Regardless, President Obama can now sign both bills granting him both TPA and renewing the TAA program.

The fascinating TPA legislative roller coaster ride has now come to an end.  House Speaker Boehner and Senate Majority Leader McConnell both deserve a great deal of credit for pulling off a legislative resurrection.  But this happened only because Members of Congress of opposite political parties and in opposite legislative bodies trusted each other to keep their side of the bargain.  On this issue, Washington overcame numerous obstacles to show the world that the U.S. was not completely dysfunctional and that different political parties can work together on issues of mutual agreement.

Now, it is expected that the negotiations on the Trans-Pacific Partnership (TPP) will quickly wrap up.  This is critically important in order to give the U.S. Congress sufficient time to debate the TPP before the beginning of the next U.S. presidential election season, which is expected to commence in earnest in January.  The TPP implementation legislation will be the next big trade policy debate in Congress.  Regardless, Korea will now have to wait until the agreement is finalized in order to join in the second round of nations expected to accede to the TPP.  Because TPP is modelled, in part, on the high-quality Korea-U.S. Free Trade Agreement, it should not be difficult for Korea to meet the terms and conditions of the TPP.

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Photo from Jennifer Stahn’s photostrean on flickr Creative Commons.

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