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 The agreement, over six months in the making, sets the stage for a
bruising legislative battle over Obama's proposed Trans-Pacific
Partnership (TPP) and similar trade deals, with many Democrats
opposed to the legislation along with a small but vocal contingent
of Republicans.
The TPP, a potential legacy-defining achievement for Obama, would
connect a dozen economies by cutting trade barriers and harmonizing
standards covering two-fifths of the world economy and a third of
global trade.
The bill gives lawmakers the right to set negotiating objectives,
but would restrict them to a yes-or-no vote on trade deals such as
the TPP.
The Obama administration announced in late 2009 that it was entering
TPP negotiations with Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Japan, Washington's key partner in the trade pact, was cautiously
optimistic after the agreement.
 "You can say that we have just cleared one obstacle to TPP
negotiations," Japanese Economics Minister Akira Amari said in Tokyo
on Friday. "Japan is holding working-level talks with the United
States today. Depending on how that goes, I want to decide today
whether or not we can proceed to more formal minister-level talks."
The U.S. Trade Representative has called TPP the "cornerstone" of
Obama's Asia-Pacific economic policy. It also is important to U.S.
manufacturers and farmers eager to expand already significant sales
to the region by winning lower tariffs and other breaks.
“This is a smart, bipartisan compromise that will help move America
forward," Republican Senate Finance Committee Chairman Orrin Hatch
said after leaders of Congress’s tax-writing committees reached
agreement on the legislation, which will be introduced in the Senate
and House of Representatives.
U.S. labor unions that are active supporters of Democratic
politicians fear the deal will favor big U.S. corporations at the
expense of American jobs and tougher foreign safety and
environmental standards.
While trade associations and companies such as Intel Corp <INTC.O>,
Emerson Electric Co <EMR.N> and Microsoft Corp <MSFT.O> welcomed the
move, unions immediately announced a new advertising campaign to
pressure lawmakers.
Similar arguments raged in the run-up to the 1993 congressional
approval of the North American Free Trade Agreement between the
United States, Canada and Mexico. Twenty-two years later there is
still a debate over that deal, which badly split the Democratic
Party and was passed in the House of Representatives by a narrow
234-200 vote.
AGREEMENT
The Obama administration has faced pressure to make progress on the
bill ahead of a meeting between Obama and Japanese Prime Minister
Shinzo Abe on April 28 in Washington.
The United States and Japan are the two biggest economies among the
TPP countries and an agreement between them is central to the pact.
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Japanese officials have said success in the TPP negotiations depends
on whether the U.S. Congress approves fast-track measures to ease
passage of trade deals, or trade promotion authority (TPA).
Japan and other TPP countries have said fast-track authority would
give trading partners certainty that agreements will not be picked
apart.
TPP must pass Congress this year to avoid being bogged down in the
run-up to the 2016 U.S. elections where it could put Hillary
Clinton, who is seeking the Democratic nomination for president, in
a difficult spot.
As a former member of the Obama administration, she needs to walk a
tightrope between supporting her former boss and warning of the need
for tougher trade deals. Her husband, former President Bill Clinton,
oversaw passage of the NAFTA deal that many unions loathe.
The deal between Hatch and the panel's top Democrat, Ron Wyden, to
move Trade Promotion Authority ahead in tandem with a bill to extend
support for workers hurt by trade is no guarantee the legislation
will pass Congress.
Opponents are lobbying hard to defeat it and many Democrats are
still undecided. The bill also faces opposition from some
conservative Republicans opposed to delegating power to the White
House.
"You bring up TPA in the House today, the best you would have is a
handful of Democrats," Sander Levin, the top Democrat on the House
of Representatives committee responsible for trade, said at a
Bloomberg conference.
Still, 11 members of the New Democrat Coalition, seen as the most
likely source of potential Democratic support, said the package
included several of their priorities and they would work with
colleagues to make the bill as strong as possible.
Chuck Schumer, tipped to become the Senate's Democratic leader after
the 2016 elections, told a committee hearing he opposes TPA. He and
other Senate Finance Committee Democrats said it is not fair to rush
such an important issue.
"You can't fast track fast track - that's a complete abdication of
our responsibilities," said Ohio Democrat Sherrod Brown.
(Additional reporting by Lisa Lambert in Washington and Stanley
White in Tokyo; Writing by Richard Cowan; Editing by Jason Szep,
Chizu Nomiyama and Raju Gopalakrishnan)
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