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May 24, 2015

U.S. Senate Passes TPA Without Portman Currency Amendment

Late last Friday night, the U.S. Senate passed Trade Promotion Authority (TPA) legislation on a 62 to 37 vote without an important currency amendment that MSCI had supported. (Click here to see how individual senators voted on the bill.) 

The chamber narrowly rejected an amendment to TPA offered by Sen. Rob Portman (R-OH) that would have made “it a principal negotiating objective of the United States to address currency manipulation in trade agreements.” (Click here to see how individual senators votes on this amendment.) 

In a statement, U.S. House Ways and Means Committee Chairman Paul Ryan (R-WI) said he also opposes Sen. Portman’s amendment and defended an alternative amendment offered by Sen. Orrin Hatch (R-UT) and Sen. Ron Wyden (D-OR) that passed by the Senate on a 70 to 29 vote. Chairman Ryan argued, “The better approach is the one offered by Senators Hatch and Wyden, which ensures that the administration will use its tools to rein in currency manipulation. We can and must deal with this problem, but we shouldn’t kill TPA and future trade agreements in the process.” (U.S. Treasury Secretary Jack Lew said he would recommend that President Barack Obama veto the TPA bill if Sen. Portman’s amendment was included in the legislation. Since there are not enough votes in Congress on this matter to override a presidential veto, this move would have killed TPA.) 

According to Politicos Morning Trade, there was a significant difference between the Portman and Hatch amendments. Politico explains the Hatch amendment “places ‘enforceable rules’ at the front of the menu of options for addressing currency manipulation in trade agreements.” The Portman amendment “demand[ed] those rules.” 

Debate on Trade Promotion Authority, which allows Congress to vote on future free trade deals but not to amend or filibuster them, will now move to the U.S. House where it is still unclear whether Republican leaders have the votes to pass the bill. According to Politico Pro (subscription required), about 40 to 45 Republicans are expected to vote against TPA while no more than 25 Democrats are expected to vote for it. If 45 of the chamber’s 247 Republicans vote against the measure, GOP leaders would need just 16 Democrats to pass the bill. 

Currency manipulation has a very real effect on the American metals industry. Byer Steel Corp. CEO Burke Byer recently told American Metals Market (subscription required) that, “We’re being assaulted by unfairly subsidized or manipulated operations, (which) are exporting their unemployment to us by dumping steel of all types of products.” Congress is out of session this week and many lawmakers are back home. MSCI encourages its members to contact their House representatives this week to tell them to support efforts in that chamber to add strong, enforceable currency rules to TPA. MSCI has contact information for all members of Congress on its website

Before you call or write, review MSCI President and CEO Bob Weidner’s recent column, available here, on TPA and currency. MSCI also encourages members to read this column from Lapham-Hickey Steel Corp. President Bill Hickey. Finally, MSCI also encourages its members to mention a new Ipsos poll that found more than two-thirds of Americans don’t think Congress should approve trade deals that don’t prohibit currency manipulation.