WASHINGTON—The Senate passed a bill to crack down on unfair foreign-trade practices, in a push to ensure that an emerging trade pact sought by President Barack Obama is accompanied by tough enforcement of trade rules.
The vote on the bill, a customs measure that includes provisions aimed at cracking down on currency manipulation and bolstering the enforcement of trade rules, was 78-20. Its passage followed days of rocky negotiations over the path of a measure that would expedite approval of trade deals, most immediately the Trans-Pacific Partnership, an accord between the U.S. and 11 other nations around the Pacific. The measure needed at least 60 votes to pass.
Democrats, even those who favor new trade deals, have been worried about ratifying that pact without also blocking other countries from engaging in unfair practices, such as manipulating their currency, dumping their products in the U.S. at artificially low prices or using other tactics that disadvantage U.S. companies.
“We cannot have trade promotion without trade enforcement,” Sen. Sherrod Brown (D., Ohio) on the Senate floor on Thursday.
Enforcement is so politically important that the White House issued a statement supporting many of the tough new enforcement measures and didn’t issue a veto threat over a currency provision that it nonetheless made clear it opposes.
The vote cleared a path for the Senate to consider whether to open debate on giving the president trade promotion authority, the power to submit trade pacts to Congress with an up-or-down vote without amendments.
Later Thursday, the Senate voted 65-33 to take up a fast-track bill that would also renew a program that helps workers hurt by trade deals. Republicans joined forces with protrade Democrats to advance the bill, overcoming opposition from liberals who want to block new trade deals, especially an emerging pact with 11 nations around the Pacific, the Trans-Pacific Partnership. Sixty votes were needed for the bill to clear this first procedural hurdle.
The final Senate fast-track bill is expected to come up for a vote next week before Congress adjourns for a Memorial Day recess.
The White House has argued that the fast-track power is essential to the 12-nation trade pact because negotiating partners need confidence that any concessions they make will be rewarded with congressional ratification of the deal.
The most contentious provision in the customs and enforcement bill is a measure to give the U.S. more power to combat currency manipulation, in which countries artificially lower the costs of their products by depressing the value of their currency. The measure, added by Sen. Chuck Schumer (D., N.Y.), would treat currency undervaluation as a subsidy that could warrant imposing countervailing duties.
Currently, U.S. firms can petition the government to impose punitive tariffs on imports from rivals if the goods received improper subsidies from foreign governments.
The currency language is aimed at China—a country that is not part of the Pacific trade pact—but the White House and other critics say it could scuttle the entire agreement by souring relations with trading partners. Because of the strong White House opposition, the currency measure isn’t expected to survive as the customs bill wends its way through Congress. The House Ways and Means Committee has already passed a significantly different customs bill, and Mr. Obama could always veto the legislation if it retained the currency language.
Among other things, the customs bill would also give the public a new import-monitoring tool so that industries affected—like steel companies or solar-panel makers—can file trade cases with the Commerce Department and the U.S. International Trade Commission as an import surge happens instead of well after the fact, once the damage is done. The bill would also close a loophole that allows imports of products made with forced and child labor if a company can prove that such labor is the only way to obtain those products.
Source: www.wsj.com