In a rare show of bipartisanship, House Republicans helped pass legislation to give President Obama the power to fast track his trade agenda. Members of the President’s own party blocked the bill in both chambers of Congress. But the measure was passed by the House on Thursday, June 18th. The Senate will likely act on it the following week. (Source: Bloomberg, June 18, 2015.) Using the fast track authority, the Obama Administration can prevent Congress from amending the Trans-Pacific Partnership, or TPP. This would force a straight up or down vote on the trade deal between the 12 Pacific countries.
Many Democrats oppose the TPP because they feel it will displace too many American workers, while most of the benefits will flow to corporations. President Obama has stated that a separate bill providing assistance to displaced workers must be passed alongside the trade deal. That bill has yet to come to a vote. Supporters of the deal argue that free trade is not only an inevitable result of globalization, but that it will benefit Americans over the long term. The U.S. would gain tremendous access to emerging markets by trading freely with countries like Japan, Singapore, and Malaysia. The Pacific Rim countries participating in the deal account for 40% of global output. (Source, The Economist, June 19, 2015.)
Pivot to Asia
The TPP is a cornerstone of the Obama Administration’s strategic shift towards Asia; home to many of the world’s fastest-growing economies. Before the TPP, America was “poised to be marginalized from the process of regionalism in Asia.” (Source: Brookings, June 19, 2015.) If the bill gets the required 60 votes in the Senate, it will head to the President’s desk. Democrats will then try to pass the accompanying legislation to aid displaced workers. A potential roadblock may pop up if pro-trade Democrats insist on passing both bills simultaneously, but the Republican Senate Leader has already dismissed that idea. An intensive political conflict is imminent, but analysts worry that America’s credibility with its international partners is at stake.