Barack Obama was given the authority he has long sought to expedite negotiations for a massive trade deal with countries on the Pacific rim, propelling the US toward a landmark agreement that, both proponents and critics agree, will reshape the global economy.



The Republican-controlled Senate finally passed legislation on Wednesday that gives the president the power to “fast-track” negotiations with the 11 other countries party to the Trans-Pacific Partnership.

The vote, which passed 60-38, was a significant victory for multinational corporations which have been lobbying hard for a trade agreement expected to lower tariffs and create new regulations for sectors as diverse as agriculture, banking and the pharmaceutical industry.

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A vote to advance related trade legislation, intended to soften the blow for American workers who lose their jobs, was also immediately passed in the Senate. It is expected to be put to a vote in the House on Thursday.

That bill, however, will be eclipsed by congressional approval of the trade promotion authority, which constitutes a huge breakthrough for the Obama administration and its wider effort to “pivot” foreign and trade policy toward Asia.

The White House has spent months trying to win over sceptical labor union leaders and Democrats who are wary of a repeat of Nafta, the free trade agreement with Canada and Mexico signed into law by Bill Clinton in 1993. The overall effects of that deal are disputed, but many economists argue it resulted in a US trade deficit and the loss of manufacturing jobs overseas.

The Obama administration argues the emerging Pacific deal – which will be subject to strict confidentiality until a final draft is agreed – will be different, levelling the playing field for American workers and raising standards abroad. His administration has branded the pact with Pacific countries “the most progressive trade agreement in history”.

The fast-track authority now invested in the president enables him to present Congress with a complex final package, combining a reduction in trade barriers, on everything from cars to rice, with new regulations governing the environment, labour and copyright.

Congress can still reject that final deal, but Wednesday’s endorsement of the trade promotion authority, which followed a similar vote in the House last week, prevents the legislature from blocking or amending the text.

As a result, the agreement, which would govern commerce over 40% of the world’s economy, including participating countries such as Australia, Canada, Mexico, Chile, Vietnam and Japan, has taken a significant step forward.

The vote also significantly increases the prospects of another trade agreement with Europe, which is in the early stages of negotiation but could now swiftly follow the TPP.

Forecasting the economic impact of the Pacific accord is a more complex process. One model widely cited by advocates predicts the Pacific agreement would recalibrate the employment sector and add some $77bn to US real incomes by 2025.

But critics of the deal question those calculations, and point to the risk of unintended consequences of allowing profit-driven corporations a hand in drafting and enforcing regulations. Leaked documents from the negotiations, intermittently released by WikiLeaks in recent months, have sparked alarm among environmentalists and global health organisations.

On the broader issue of regulations, advocates argue the Pacific accord will raise standards abroad in places like Vietnam and Peru, while critics predict a lowering of standard for US businesses struggling to remain competitive.

Although the Pacific trade agreement received a major boost this week, obstacles remain in Washington, especially for Democrats Massachusetts senator Elizabeth Warren, who have forcefully questioned the wisdom of deal.

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The newly-passed legislation was the result of months of tussling on Capitol Hill, and a rare alliance between the Obama administration and Republican leaders. “We were really pleased to see President Obama pursue an idea we’ve long believed in,” Republican majority leader Mitch McConnell said on the Senate floor, earlier Wednesday. “We thank him for his efforts to help us pass a bill to advance it.”



An earlier attempt to pass the bill – legislation bolstering support for a federal program that provides assistance to workers whose jobs are displaced by global trade – failed.

That component, known as the Trade Adjustment Assistance (TAA), was separated from the trade promotion legislation that received final passage on Wednesday. Republican leaders promised the TAA billwould be put to a separate vote, which was already underway in the Senate on Wednesday.

Democrats, accepting defeat in the wider battle over Obama’s Pacific trade deal, have signalled they will support that measure, intended as a sweetener for unions and the left.

However it is unclear whether the supplementary legislation, which provides job training and other assistance to workers, will garner sufficient support among House Republicans who view it as an unnecessary government subsidy.

Both congressional chambers are poised to move forward with the TAA legislation, as a separate bill. It passed a procedural hurdle in the Senate on Wednesday, in a vote 76-22 vote held immediately after the main trade promotion bill. An additional vote is expected in the House on Thursday with the wider package of trade bills completed before the end of next week.



The White House has declined to say whether Obama would withhold his signature from the fast track legislation if the accompanying TAA bill does not also pass.

However, even if the job assistance package fails, it seems unlikely the president would withhold his signature from the trade promotion bill, a hard-fought legislation achievement that he views a necessary stepping stone to a Pacific deal that will cement his economic legacy.

No longer a headache for Obama, the Pacific trade pact now becomes a more complicated issue for the Democrat in pole position to succeed Obama in the White House.

Hillary Clinton, who backed the Pacific deal in principle, when she was secretary of state, has avoided taking a clear position on the deal. Last month Clinton’s campaign chairman, John Podesta, recently joked with Democratic donors that wanted them to help make the contentious issue “go away”.

Clinton’s main rival, Bernie Sanders, in contrast, has made opposition to the Pacific agreement a cornerstone of his campaign, and discovered the issue is a magnet for progressives in the party who are steadfastly opposed to another free trade agreement.

“In my view, US trade policies for the last 35, 40 years have been a disaster. They have resulted, and I think it has been objectively documented, in the loss of millions of decent paying jobs, and a race to the bottom which is lowering wages,” Sanders told the Guardian during a campaign stop in New Hampshire earlier this month.

Straying from his general policy of not poking adversaries, he added: “I find it hard to imagine how any candidate for president – Hillary or anybody else – cannot declare their position. This is a very important issue – you can be for it or you can be against. I’m against it and I think Hillary should tell us where she stands.”