By Siobhan Hughes
WASHINGTON--The Senate on Friday passed major trade legislation
that would pave the way for President Barack Obama's signature
Pacific trade deal, marking a victory for the Obama administration
and Republican leaders in Congress and sending the bill toward an
uncertain fate in the House.
Lawmakers defeated a controversial amendment on currency
manipulation that drew a veto threat from the White House and then
moved the bill steadily through to a final vote just one day after
a revolt among some Democrats nearly derailed the bill, a major
priority for Mr. Obama.
The Senate voted 62-37 to approve so-called fast track, which
would help conclude the Trans-Pacific Partnership with Japan and 10
other countries and ensure that the Pacific deal and others would
get an up-or-down vote in Congress without amendments.
The Pacific agreement, which officials could finish soon if the
House also approves fast-track, is set to lower tariffs and other
barriers at the border and institute commercial rules of the road
designed to spur flows of goods, services and finance in a dozen
countries comprising some 40% of global economic output.
The Senate passage of fast track, also known as trade promotion
authority, is a win for Mr. Obama and Treasury Secretary Jack Lew,
who made personal calls to clear roadblocks in recent days and
discourage senators from approving language that would mandate
enforceable rules against currency manipulation, opposed by trading
partners.
"I want to thank senators of both parties for sticking up for
American workers by supporting smart trade and strong enforcement,
and I encourage the House of Representatives to follow suit," Mr.
Obama said in a statement.
The bill's passage also vindicated a strategy of Senate Majority
Leader Mitch McConnell (R., Ky.), who gambled that he would be able
to push fast track through before the Memorial Day recess, while
allowing at least some debate and amendments as he had promised. It
was unclear late Friday if the plan would allow for renewing a
highway program and a national-security program, without cutting
short the recess.
"The House will take up this measure, and Republicans will do
our part, but ultimately success will require Democrats putting
politics aside and doing what's best for the country," House
Speaker John Boehner said in a statement.
Only 14 Democrats voted for fast track, and opponents complained
that Mr. McConnell didn't allow sufficient time for debate on the
measure. Backed by labor groups, most Democrats oppose fast track
and the Pacific deal, saying it would move some jobs overseas and
do little to help the working class.
Friday's vote marked a defeat for Sen. Elizabeth Warren (D.,
Mass.), who clashed with Mr. Obama in recent weeks, criticizing the
secrecy of TPP negotiations and arguing that fast track could be
used by a future president to erode regulations favored by
Democrats, including rules for Wall Street.
Lawmakers voted down her amendment that would prevent trade
deals from getting an expedited vote if they include an established
but controversial arbitration system that allows investors to
challenge foreign governments.
The most difficult fight Friday came over an amendment backed by
two senators from auto states--Sen. Rob Portman (R., Ohio) and Sen.
Debbie Stabenow (D., Mich.)--that would press the administration to
crack down on overseas currency manipulation through enforceable
rules in the TPP. Mr. Lew called the legislation a "poison pill"
for the trade talks, but Mr. Portman said it was a "vitamin."
The amendment was rejected, 48-51, but Mr. Portman, a former
U.S. trade representative, said he would "keep up the fight" on
inserting currency rules favored by Detroit auto makers worried
they will lose tariff advantages in the TPP. "There's an
opportunity in the House," he said.
"We look forward to continuing to work with lawmakers to address
this critical issue as TPA moves through the legislative process,"
said Ziad Ojakli, vice president for government and community
relations at Ford Motor Co.
Instead of the Portman-Stabenow amendment, the Senate approved a
less binding currency amendment backed by the architects of fast
track legislation, Sen. Orrin Hatch (R., Utah) and Sen. Ron Wyden
(D., Ore.).
Enforceable currency rules are a priority for the top Democrat
on the House committee that oversees trade, Rep. Sander Levin of
Michigan, who also backs measures to ensure Detroit's cars make
inroads in the Japanese market.
Sen. Chuck Schumer (D., N.Y.), who opposes Mr. Obama's trade
policy, warned that the House may need enforceable currency rules
to pass fast track. He has backed a separate set of binding
currency rules in a customs bill Congress is considering.
All but a dozen or so House Democrats oppose fast track, and a
broad group of conservatives is wary about supporting policies that
could put pressure on businesses in their districts or grant
additional authority to Mr. Obama. Others are concerned about the
commercial rules Mr. Obama is touting in the TPP, or the religious
restrictions and foreign policies of trading partners.
Republican leaders had hoped the House would also consider fast
track before the one-week recess, since liberal and conservative
grass-roots opponents of Mr. Obama's trade policy are expected to
put pressure on lawmakers back home.
"That's always a concern--individuals go back to their districts
and they're subject to misinformation that's put out there," said
Rep. Charles Boustany (R., La.), who's helping build GOP support
for fast track.
Labor groups say that too little information about the TPP is
public and have vowed to help defeat the legislation in the
House.
"This is a sad day," United Steelworkers President Leo Gerard
said in a statement. "At election time, voters will remember who
was on their side and who voted to sell them out."
Write to Siobhan Hughes at siobhan.hughes@wsj.com