14 May 2015

Need to know: why Obama’s trade deal is in trouble


The Transatlantic Trade deal, which would remove custom duties and harmonise international regulations and standards between the US and EU, has suffered a setback, after US senators have voted against giving President Barack Obama the authority to negotiate the deal on their behalf.

In order to fasttrack the deal, Obama had hoped to pass a Trade Promotion Authority bill, which would require 60 out of 100 senators to vote in his favour and thus limit legislatures’ power to a simple “yes or no” vote, as well as preventing Congress from being able to amend international trade deals for the next five years. The bill failed to pass, gaining 52 senators’ votes in favour, and 45 against.

As a result, Congress has retained its power to filibuster or amend any trade deal Obama might agree on, resulting in concern amongst supporters of international trade – both the Trans-Pacific Partnership (TPP) and the The Transatlantic Trade and Investment Partnership (TTIP) – that the deal may be further stalled, after already lengthy negotiations.

What is most remarkable about the Senate vote, however, is that most of the opposition came from Obama’s own Democrat party, with only one voting in favour. Opposition from the left wing of the Democrat party, led by Elizabeth Warren (Massachusetts), means that Obama is in the odd position of having support from the opposing party rather than his own. Critics of the bill voiced their concern over lack of transparency and a certain clause which they claim may leave local level policy makers vulnerable to overseas investors if local laws affect their profit-making ability.

Many, however, remain confident that the bill will eventually pass, but accept that some adjustments will have to be made to attract more Democratic support. As Texas senator John Cornyn, the second highest ranking Republican in the Senate, pointed out, “it’s a question of does the president of the United States have enough clout with members of his own political party to produce enough votes to get this bill debated and ultimately passed.”

Abbie Martin is a CapX contributor.