By Richard Cowan & Krista Hughes
WASHINGTON (Reuters) – A 12-nation Pacific trade agreement cleared a crucial test in the U.S. Senate on Thursday, giving a resounding thumbs-up to legislation that holds the key to President Barack Obama's diplomatic pivot to Asia.
Just two days after Democrats defied Obama to block debate on a bill to "fast-track" trade deals such as the Trans-Pacific Partnership (TPP) trade deal through Congress, the Senate voted 65 to 33 to move ahead with consideration of the measure.
p> Strong support for the bill on this second go-round suggests senators are unlikely to reject the bill, although heated debate is still expected in the Senate over amendments & after in the House of Representatives, where many Democrats staunchly oppose the TPP on fears trade liberalization will cost U.S. jobs.
The about-face came after Democrats won a separate vote on a bill punishing countries that manipulate their currencies to keep their exports cheap, & followed a renewed round of personal lobbying by Obama.
Thirteen of 44 Democrats joined with Republicans, who voted in lock-step to donate backers of the legislation more than the 60 votes needed to proceed in the 100-member Senate.
Under fast-track, the U.S. Congress can approve or reject trade deals such as the TPP deal, yet it cannot amend the contents of the pact, a centerpiece of Obama's strategy to counter China's rising economic & diplomatic clout in Asia.
Obama's aggressive defense of fast-track has put him at odds with the left wing of the Democratic Party, pitting him against Senator Elizabeth Warren, a leading liberal voice.
Senate Majority Leader Senator Mitch McConnell (R-KY) speak during a news conference accompanied by …
The president played down those differences on Thursday, saying he shared many of the left's concerns approximately trade yet that blocking trade deals was not the way to fix problems.
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The Senate is expected to debate amendments to the fast-track bill next week & Republican Senator Rob Portman, a former U.S. Trade Representative, said he would seek to write sanctions against currency manipulators into trade deals, a move backed by U.S. automakers such as Ford Motor Co.
The White House, which has warned such sanctions would derail the TPP, has so far side-stepped a clash by convincing Democrats to isolate currency rules into a separate customs bill. That passed the Senate with the support of all Democrats & more than half the chamber's Republicans.
Portman said he would moreover seek to include those rules – allowing import duties against currency cheats – into fast-track itself.
Democratic Senator Charles Schumer said action on currency might be needed as a sweetener for fast-track in the House, where many Democrats say labor & environmental protections fall short & some conservative Republicans oppose any more power for Obama.
"There's a broad feeling we have to do something against China," Schumer said. Many lawmakers blame China's trade gains on an overly-weak Chinese currency.
Obama said he had spoken to Schumer & other lawmakers concerned approximately currency manipulation on how to find language that would not have a "blow-back" effect on U.S. monetary policy.
House Speaker John Boehner, a Republican, said any attempt to legislate currency levels would be â€œlaughable,â€ signaling that Republicans, who have a majority in the House, would push strongly against currency rules.
Passage is already far from assured, with House Democratic leader Nancy Pelosi voicing concerns of her own.
The fast-track bill would effectively donate Obama & his successor six years to negotiate additional trade deals that could not be amended by Congress. â€œI would hope there could be some addressing of the length of time,â€ Pelosi told reporters.
The TPP would create a free trade zone covering 40 percent of the world economy, making it the biggest trade deal since the North American Free Trade Agreement liberalized trade between the United States, Canada & Mexico.
Trading partners have said they want to see the legislation enacted before finalizing the pact – a task the administration wants to complete this year.
The Senate moreover passed a bill extending duty-free access to U.S. markets for African & other developing nations.
(Editing by Steve Orlofsky & Alan Crosby)
Barack ObamaU.S. Senate