Friday

19th Jul 2019

Congress harms prospects of EU-US trade pact

  • Vote comes as latest blow to TTIP (Photo: prameya)

The prospects of a landmark EU-US trade deal being agreed swiftly have suffered a blow at the hands of US lawmakers.

An unusual coalition of left-wing Democrats and Tea Party Republicans on Friday (15 June) voted to terminate the so-called trade adjustment assistance (TAA) programme.

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Set up by Democrats in the 1970s, it provided aid to workers made redundant as a result of free trade agreements.

But in cancelling it, they also shot-down related legislation which gives the White House sweeping powers to negotiate trade pacts without Congressional amendments or filibusters.

Despite president Barack Obama making an appearance in Congress in a last-minute bid to drum up support for the trade promotion bill, only 40 Democrats voted in favour, resulting in a 126 to 303 defeat.

The related fast-track trade authority would have meant that US trade deals could not be amended by Congress, which would hold a single vote to ratify or veto.

Failure to agree on it threatens to scupper the draft Trans-Pacific Partnership (TPP) struck between the US and 12 Pacific Rim countries, including Japan, but not China.

It also increase the chances that the current version of the Transatlantic Trade and Investment Partnership (TTIP) with the EU will be stalled or re-written in Congress.

“We want a better deal for America’s workers”, said Nancy Pelosi, the House minority leader for the Democrats. Fellow Democrat Rick Nolan described the proposed TPP as “a race to the bottom”

“These kinds of agreements make sure that the global economy’s rules aren’t written by countries like China; they’re written by the United States of America,” said Obama following the vote.

“To stand in their way is to do nothing but preserve the long-term status quo for American workers, and make it even harder for them to succeed.”

John Boehner, the Republican speaker of the House, noted: “Republicans did our part, and we remain committed to free trade because it is critical to creating jobs and growing our economy”.

For her part, Friends of the Earth president Erich Pica described the vote as “a significant victory in the fight to ensure that toxic trade agreements like the TPP do not get bulldozed through Congress”.

The US vote is the second setback inflicted on Obama’s trade agenda. Last month, the Senate also rejected the Trade Promotion Authority, despite it being supported by a majority of Republicans.

The EU-US trade talks were also thrown into doubt after lawmakers in the European Parliament postponed a vote because of disagreements between political groups on the status of investor protection rules.

Trade officials will convene for the 10th round of talks in July, but negotiators and political leaders on both sides of the Atlantic are becoming frustrated by the slower-than-expected progress.

The EU's chief negotiator has conceded that talks will have to continue into 2016, despite an initial deadline of the end of 2015.

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Analysis

What did we learn from the von der Leyen vote?

The vote on von der Leyen showed the fundamental change in EU politics. The rise of the European Parliament, the power of political parties, and the fragmentation of politics, are new realities to be taken into account.

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