[author: Patrick J. Togni]
Like a football team scoring a touchdown in the closing seconds of the first half, the Senate passed the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (the Trade Act of 2015) at 8:51 p.m. on Friday, May 22, before adjourning for the Memorial Day recess. As we reported last month, Senate passage of so-called Trade Promotion Authority by a 62-37 margin is a prelude to "the hard part" for Congressional consideration of the Trade Act of 2015 – action in the House of Representatives. Thus, like in any football game, the final score is what really matters.
The Senate-passed version would renew trade promotion authority through July 1, 2018 (with the possibility for an extension through July 1, 2021), and included two amendments. The first modification, sponsored by Senator James Lankford (R-OK), would require U.S. trade negotiators "to take into account conditions relating to religious freedom of any party to negotiations for a trade agreement with the United States." The Senate adopted this provision unanimously.
The second change to the Trade Act of 2015 addressed currency manipulation, which has been a far more controversial issue. Language proposed by Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) prevailed by a vote of 70-29, overcoming a competing amendment sponsored by Senators Rob Portman (R-OH) and Debbie Stabenow (D-MI), which was defeated 48-51. Several U.S. manufacturers and organizations supported the Portman-Stabenow language, including the steel and auto industries.
The principal distinction between the two competing Senate currency amendments was that the Portman-Stabenow language would have mandated the establishment of "strong and enforceable rules against exchange rate manipulation that are subject to the same dispute settlement procedures and remedies as other enforceable obligations under the agreement." Opponents—including the White House and Treasury Secretary Jack Lew—countered that such provisions would increase the risk of currency wars and that the Hatch-Wyden amendment would be effective without overreaching. Separately, the International Monetary Fund (IMF) issued a report in late May which concluded that "substantial real effective appreciation over the past year has brought the {Chinese} exchange rate to a level that is no longer undervalued," and urged China to "aim to achieve an effectively floating exchange rate within 2-3 years." In any event, currency manipulation will likely remain a controversial issue in the House.
The Senate-passed bill also would extend the Trade Adjustment Assistance (TAA) program through June 30, 2021 and would authorize up to $450,000,000 in TAA training funds annually through 2021.
House Ways and Means Committee Chairman Paul Ryan (R-WI) acknowledged the Senate's efforts as "an important step toward a healthier economy and greater American leadership in the world." Although reports suggest that the House intends to consider the Trade Act of 2015 in June, there are several moving parts that could affect both timing and substance. For example, Chairman Ryan has expressed a willingness to permit separate Customs reauthorization and enforcement legislation to serve as a vehicle for consideration of measures sought by the House Congressional Steel Caucus to strengthen antidumping and countervailing duty laws, and to modify human trafficking-related language that was included in the Trade Act of 2015 by Senator Robert Menendez (D-NJ) despite White House opposition, among other changes based on earlier Senate amendments. These moves are designed in part to secure consideration of and support for the Trade Act of 2015 as is, and without need for a House-Senate conference committee.
In sum, the game is on and both sides are working to secure the necessary votes on Trade Promotion Authority before the final whistle blows.
