A controversial amendment on currency manipulation offered by Senator Rob Portman failed narrowly on a bipartisan vote of 51-48 on Friday.
The bipartisan amendment, introduced by the Ohio Republican and Democrat Debbie Stabenow of Michigan, was offered to the legislation before Congress that would give the president “fast track trade authority”.
It would have cracked down on countries that manipulate their currencies and is particularly targeted towards concerns that Japan and Malaysia have manipulated their currencies in the past to increase exports. If the amendment had passed, secretary of the treasury Jack Lew had stated he would urge President Obama to veto the bill if the Portman language made it to his desk.
Japan and Malaysia are two of the 14 countries that have signed up for the controversial Trans-Pacific Partnership (TPP). The current bill would not allow the US to join the TPP but would allow trade bills to be “fast tracked” and given an up or down vote by Congress without any amendments. The result is that legislators are targeting the fast track bill for any amendments.
In particular, American automakers are considered about Japan’s monetary policy. This prompted Tennessee Republican Bob Corker, a supporter of the TPP, to assail Portman’s amendment as “another bailout for the auto industry” in a floor speech on Friday morning.
Even without the Portman language, the bill is likely to face a number of obstacles towards becoming law. It only made it through a procedural hurdle in the Senate earlier this week because language reauthorising the Export-Import Bank was attached to the legislation. While this attracted the votes of several Democrats in the Senate, the bank is anathema to many Republicans in the House. The bill also still faces strong opposition from those in both parties sceptical of the benefits of free trade agreements like the TPP.
