Trade Promotion Authority Bill: What you need to know about Bill blocked in US Senate

US President Barack Obama speaks on trade at Nike corporate headquarters in Beaverton, Oregon, on May 8, 2015. -- PHOTO: REUTERS
US President Barack Obama speaks on trade at Nike corporate headquarters in Beaverton, Oregon, on May 8, 2015. -- PHOTO: REUTERS

The United States Senate delivered a major blow to President Barack Obama's trade agenda on Tuesday, blocking debate on a Bill that would have smoothed the path for a Pacific trade pact that included Singapore among its original signatories.

Here are some things to know about the deal:

1. What was at stake?

The Trade Promotion Authority (TPA) Bill is seen as a critical step towards the successful conclusion of two landmark free-trade negotiations the United States is currently involved in.

The first is the 12-nation Trans Pacific Partnership (TTP), which includes Japan and Singapore. The other is the Transatlantic Trade and Investment Partnership (TTIP), which involves the European Union. Both are among the largest free-trade deals ever negotiated by the US.

The TPA forces US lawmakers to either approve or reject any trade deal administration negotiators agree to without introducing amendments. Observers generally agree that the already delicate multi-party negotiations cannot be completed without the promise that lawmakers will try and tinker with the agreement after it is made.

2. What happened in the Senate?

Senators, voting largely along partisan lines, voted 52-45 to put the Bill up for debate on the floor. Unfortunately, this did not meet the 60-vote requirement to overcome a Democratic filibuster.

This was surprising given that this was just a procedural vote, not a vote on the Bill itself, and that it was widely expected that it was going to be easier to pass the Bill in the Senate than in the House of Representatives.

Views in the Senate, where lawmakers represent entire states, tend to be more moderate than in the House, where Congressmen represent smaller districts.

The key disagreement in the Senate on Tuesday was whether to bundle the TPA with a law that cracks down on currency manipulation.

All in, Democrats want to bundle three other Bills together with the TPA, arguing that the package would ensure that any trade deals would meet a high standard.

Republicans argued that some of the amendments would effectively kill the TPA Bill since the White House opposes, as do some TPP partners and large factions in the House. They say the White House would not accept a TPA that came bundled with a currency manipulation law.

The two sides had initially compromised to bundle the TPA with a law that expands aid for displaced workers but debate the other Bills separately. In the days leading up to the vote, the Democrats seemed to have changed their mind.

3. Is the TPA dead?

Not yet, but it's not looking good. Both sides have agreed to go back to the negotiating table although it is not clear how much either side is going to give in.

It is unlikely that the TPA can be passed if the Democrats do not at least agree to unbundle it from the law that contains the currency manipulation clause.

Even if the senators were somehow able to reach a compromise, the bad blood from Tuesday's proceedings promises to make any passage in the House of Representative even harder.

Anti-free-trade groups, those that see the TPP and TTIP as a threat to the American worker, will be encouraged by the vote and will campaign even harder.

And even if the two sides are somehow able to get TPA passed, it is clear that there will be major fight on the cards if any TPP agreement gets presented to Congress.

jeremyau@sph.com.sg