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Obama’s plans for inking new trade deals suffered a big defeat—this time, at the hands of free traders

Senate Banking Committee member, Sen. Elizabeth Warren, D-Mass., listens to testimony on Capitol Hill in Washington, Tuesday, Feb. 24, 2015, from Federal Reserve Board Chair Janet Yellen. Yellen said Tuesday that the U.S. economy is making steady progress, but the Fed remains patient in raising interest rates because too many Americans are still unemployed, wage growth remains sluggish and inflation is too low.
AP Photo/Susan Walsh)
Senator Elizabeth Warren spurred Democrats to block trade powers for Obama.
Published Last updated This article is more than 2 years old.

For weeks, supporters of US president Barack Obama’s request for trade-negotiating powers—considered necessary to ink major new trade deals that would cap his term in office—feared his own party would sink him. Those fears were proven correct today as Congressional Democrats blocked consideration of the powers.

Unless a deal can be found soon, this looks like the beginning of the end for Obama’s dream of a free-trade zone stretching across the Pacific and covering 40% of the world’s economic production.

The final blow arguably came when Republicans—ostensibly Obama’s allies in cutting down trade barriers—declined to link the negotiating authority to measures meant to bolster trade enforcement and assistance to workers who lose their jobs due to overseas competition. With that, support of even pro-trade Democrats dried up. Six senators who were part of the committee that proposed the fast-track negotiating authority and brought the bill to the floor voted against it today; with their support, the legislation would have been enacted.

Among those dropping support for the so-called Trade Promotion Authority, or TPA, was its strongest Democratic backer (and one of its authors), senator Ron Wyden of Oregon. His surprising decision to turn against the bill came after Republican leadership declined to consider three other trade bills, including a Trade Adjustment Assistance (TAA) measure, which would help workers displaced by low-wage labor overseas, and a customs bill that many Republicans considered a poison pill because it contained rules, opposed by the White House, to challenge currency manipulation by other countries.

Wyden’s staff tweeted a link to a video in which his Republican counterpart, senator Orrin Hatch, promises to work bring those bills to the floor together. Hatch, meanwhile, complained that Obama failed to bring his own party in line. And he said that Democrats were re-casting his expression of bipartisan goodwill as an ironclad commitment, effectively to find an excuse to bow to pressure from the left.

The pressure came mainly from a group of senators, led by Massachusetts’ Elizabeth Warren, who fear that giving the White House trade-negotiating powers will make it easier for corporate interests to push back against domestic regulation. This vote is another reminder of the populist Warren’s ability to move her party, even against a sitting president; indeed, Warren’s stand has contributed to Hillary Clinton’s ambivalence on trade, which left Obama exposed.

But it doesn’t explain why trade-loving Democrats backed off the bill. For that, you have to go back to the purpose of the TAA.

Democrats who support trade understand that it has costs and benefits. Even if they don’t buy Warren’s critiques about corporate empowerment—they might note that the US has never lost in trade arbitration with a corporation—they fear for the workers who will lose their jobs and require assistance as the economy responds to new trade rules. That’s why they wanted the TAA, which in its current form would provide unemployment benefits and skills training to those who could provide evidence that newly lowered trade barriers led to the loss of their jobs, attached to the trade-negotiating authority.

So why wouldn’t the Republicans commit to making it part of the package?

“It would gain Democrats in Senate, [but] complicate efforts to move bills through the house due to House Republican opposition” to TAA, a Democratic Senate aide said. Indeed, the measure isn’t expected to be incredibly effective, and it triggers the conservative reflex against government aid. But that’s exactly why Senate Democrats want more assurances that Republicans will back such transition aid after (or if) it passes their chamber.

Republican leaders say they will bring the bill back to the floor soon, but it’s not clear how they will woo the Democrats they need without committing to more robust aid.

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