Yves here. Wow, never in my wildest dreams would I have predicted this outcome.
By Lambert Strether. Originally published at Corrente
Remember, passing Fast Track in the Senate was supposed to be the easy part. Not only did Fast Track get rejected on its first try — “Welcome aboard the S.S. Lame Duck, Mr. President!” — now we get this. Ryan Grim explains:
The Senate approved a bill to “fast-track” trade agreements negotiated by the president. The agreement will prevent Congress from amending or filibustering Obama’s controversial Trans-Pacific Partnership agreement. The TPP deal would have a hard time surviving without fast-track authority.
But a key crackdown on human trafficking survived the legislative jujitsu. The White House considers the provision a deal-breaker, as it would force one of the nations involved in the TPP talks — Malaysia — out of the agreement.
From the US State Department:
Malaysia (Tier 3 [the worst]) is a destination and, to a lesser extent, a source and transit country for men, women, and children subjected to forced labor and women and children subjected to sex trafficking. The overwhelming majority of trafficking victims are among the estimated two million documented and two million or more undocumented foreign workers in Malaysia.
Foreign workers typically migrate willingly to Malaysia from other countries in Asia—primarily Indonesia, Bangladesh, the Philippines, Nepal, Burma, Cambodia, Vietnam, India, Thailand, and Laos—in search of greater economic opportunities.
Here I pause to note that somebody decided that it would be a good idea for the US to take in the Rohingya, the Muslim boat people who have turned to traffickers to escape a slow motion Burmese genocide, after which the Malaysians offered temporary, one-year status to such Rohingya as actually reach their shores.
Some of the migrants subsequently encounter forced labor or debt bondage at the hands of their employers, employment agents, or informal labor recruiters. Many Malaysian recruitment companies, known as “outsourcing companies,” recruit workers from foreign countries. Contractor-based labor arrangements of this type—in which the worker may technically be employed by the recruiting company—create vulnerabilities for workers whose day-to-day employers generally are without legal responsibility for exploitative practices. In some cases, foreign workers’ vulnerability to exploitation is heightened when employers neglect to obtain proper documentation for workers or employ workers in sectors other than that for which they were granted an employment visa. In addition, a complex system of recruitment and contracting fees, often deducted from workers’ wages, makes workers vulnerable to debt bondage. A Malaysian government policy implemented in January 2013 that places the burden of paying immigration and employment authorization fees on foreign workers, rather than the employers, increased this risk.
(Sounds like the sort of labor market that only a neo-liberal could love, but I digress.) So, yes, the anti-trafficking provision — assuming it has teeth, and Malaysia can’t slip by with a wink and a promise — is indeed a poison pill; Malaysia can’t possibly qualify. The administration doesn’t like that, arguing that will push Malaysia into the open arms of the Chinese, with whom the Thai junta is already flirting, but I suppose if push came to shove, Obama could throw Malaysia under the bus. More pertinent is the procedural roadblock the Menendez amendment throws in Fast Track’s way. Back to Ryan Grim:
The slavery provision’s survival means that the House will either need to amend the bill and send it back to the Senate, which would cause a delay and complicate the House debate, or pass a bill and go to conference with the Senate, also causing a delay. It also potentially could be fixed in separate legislation otherwise moving through Congress. But time is not on the side of advocates of the trade agenda, as summer recess is approaching, followed by a heated presidential campaign season. “It leaves a substantial problem that no one’s sure how will be addressed,” said one senator.
Complicating any efforts to “fix” the bill, however, is the possibility of an alliance between feminist factions in the Democratic party, and Christianist factions among the Republicans, both of whom take strongly principled positions on human trafficking.
Complicating the picture even more, when you think about it, is the potential for agita in 2016. Suppose Obama, very ironically, gets the anti-slavery provisions “fixed,” i.e. removed, and the bill passes in time. The campaign ads practically write themselves. “A vote for TPP is a vote for human trafficking.” “Why does Senator X support slavery?” Cue the ominous music. Cue pictures of skeletal women and children. Cue the die-ins on the trail. I’m sure campaign shops on both sides are practically drooling with joy, because the only way TPP will pass is with bipartisan support. Getting that amendment in there was GENIUS, and we’ll get to how that happened in a moment.
[Japanese Economy Minister Akira Amari said on Tuesday that] “TPP talks won’t be concluded unless the TPA bill is passed.”
Of course, all this Senatorial to-ing and fro-ing must look to the Asians like exactly what it is: A massive loss of face for Obama. Were I to speculate freely, I might consider this: The United States is, of course, Japan’s hegemon, and during his visit to Washington, Obama gave Prime Minister Abe a gift to take home to his voters: permission to wage offensive war. By doing that, however, Obama, as is his wont, gave up something real and definite in exchange for something unreal and vague: Abe getting TPP through the Japanese Diet at some later date. But maybe the militaristic Abe — now that he has what he really wanted — would prefer to “cave” to his rice, wheat, beef, poultry, dairy, and sugar lobbies and then shrug his shoulders, spread his palms wide, and tell Obama “What do you want? I couldn’t deliver the votes, just like you.”
So, those are some of the diplomatic moving parts. How did this happen? Two words: Robert Menendez (D-NJ). Let me repeat that: Robert Menendez. Back to Ryan Grimm:
Sen. Robert Menendez (D-N.J.) authored the provision that would effectively bar Malaysia from the agreement.
Now, when last we heard from Senator Menendez, Obama’s Justice Department had just had him indicted in a gloriously cheesy scandal, as indeed any scandal that involves the word “opthamologist” must be:
Menendez, a New Jersey Democrat, has been charged with accepting nearly $1 million in gifts and campaign contributions from Salomon Melgen, an eye doctor and longtime friend of the senator’s, in exchange for a stream of political favors.
Prosecutors say the Melgen provided the senator with luxury vacations, airline travel and tens of thousands of dollars in contributions to a legal defense fund. Federal prosecutors also allege the senator pressured officials to resolve a multimillion-dollar billing dispute between Melgen and Medicare and helped secure travel visas for Melgen’s foreign girlfriends.
Menendez and Melgen have pleaded not guilty. Menendez claims prosecutors have confused their friendship with corruption.
Dear Lord. A million bucks. What’s that these days? Chump change. And not even in cash! Besides, you should also assume that Justice can indict whoever they want in Washington for whatever whenever, because people are human, it’s a fallen world, and every motel room within four hours drive time of the Hill is bugged up the wazoo by multiple alphabet agencies, not to mention foreign powers, and that’s before we get to the cellphones and the Intertubes. So whatever the indictment is about, it’s not about corruption. But if not corruption, what? Well, the indictment happened on April 1. And this happened on March 2:
After accompanying Netanyahu into the joint session of Congress, [Menendez,] the Democrats’ ranking member of the Senate Foreign Relations Committee assumed a seat in the front row.
He doubled down in the moments after the speech.
“It was a very effective speech in outlining to the present framework of the deal that is attempting to be negotiated with Iran, and also the consequences if the deal is struck in a certain way,” Menendez told reporters. “… And that is a very powerful opportunity to develop a different narrative than the one we have been hearing.”
That is, the “narrative” Obama had been trying to construct — in one of the few acts of his Presidency people who pay attention should unreservedly support — in favor of a nuclear deal with Iran, as opposed to whatever batshit scheme Bibi and his two-bit gang of revanchist foamers have in mind. So it’s understandable that Obama would kick Menendez in the stones in April (tit) and that Menendez would kick back (for tat) in April, when he amended the Fast Track agreement in Committee — it passed on a bipartisan 16-10 vote — to include the human trafficking poison pill amendment.
But that’s not even the best part. This is the best part. As it turns out, the Menendez amendment could have been rewritten so as not to be a poison pill.
[Menendez had] settled with GOP leaders over modified language that would allow Malaysia to stay in the deal as long as it made progress toward reducing its dependence on slave labor.
But then this happened:
The modification, however, never made it into the bill.
“It’s an interesting thing, isn’t it, about Menendez — it didn’t get fixed,” Sen. Sherrod Brown (D-Ohio), a staunch opponent of the trade bill, said Friday night after the final vote. …
Ironically, it was Senate Republicans, or at least one Republican, who enabled the provision to stay. The Senate needed unanimous consent to move forward on votes on a series of amendments, including the Menendez modification, but was denied when a Republican senator objected.
So who is that Republican Senator? I really wish I knew. (Interestingly, David Dayen, who has a lucid description of the final, frantic, Fast Track maneuvering, doesn’t know or won’t say.)
So that’s were we are now. A good outcome from the most venal of motives, with a good dose of accident, error, and chaos. Pass the popcorn!
 I’m not sure how that sits with the ASEAN countries.
 The Wall Street Journal wrote an outraged editorial arguing that since there was no quid pro quo, there was no corruption. Wrong, wrong, wrong, wrong, wrong.
 Speaking of quid pro quo…. HuffPo on May 19:
WASHINGTON — Sen. Robert Menendez (D-N.J.) on Tuesday threatened to do “everything possible to have a floor fight” if President Barack Obama undercuts pending trade legislation to combat human trafficking.
“Human trafficking — modern-day slavery — is one of the great moral challenges of our time,” Menendez said during a conference call with reporters. He touted an amendment he authored that would deny trade perks to governments that tolerate egregious human trafficking offenses.
But the floor fight didn’t happen, did it? (Couldn’t Bob have arranged to give Rand a bathroom break? For the children?) And so one can only wonder why. Of course, Menendez may also have believed in his amendment; I’d be the last to say human motivations aren’t over-determined.
Some factions in Malaysia have their own, internal reasons to oppose TPP:
On the part of the government, perhaps the most difficult items in the TPP negotiations are issues related to government procurement, as well as support for SOEs and GLCs. These issues are related to the interventionist role that the Malaysian state has played in bringing about growth and redistribution. In the area of government procurement, this entails the allocation of contracts to the Bumiputra business community – a practice that dates back to the implementation of the New Economic Policy (NEP, 1970-1990) but has continued to the present day. State involvement in the economy also took the form of regulatory requirements on corporations that are above the designated size thresholds to allocate a given percentage (30 per cent) of their equity and employment to the Bumiputra community (Jesudason 1989). The implementation of NEP also saw the creation of state-owned corporations in the private sector in the late 1960s to 1970s, which served the redistributive goal of NEP through equity holdings (trusteeship, on behalf of the Bumiputra community) and employment. This strategy has evolved further from the 1980s to include corporations established for heavy industrialization (e.g. Proton) and privatized state enterprises (e.g. GLCs such as Tenaga Nasional and Telekom Malaysia). As Tham (2014) has noted, it has become increasingly difficult for Malaysian trade policies to accommodate the dual economic-race paradigm that underpins state intervention in the economy. The difficulties encountered in the TPP negotiations in the area are manifestations of this phenomenon. The Malaysian government has been seeking to deal with these issues through either a carve-out (exclusion), appropriate threshold levels or/and a transition period (delayed application). Thus far, there is no indication whether progress has been made in this area. This also makes it difficult to assess how the government’s Bumiputra policies are likely to change in response to the TPP. What is certain is that some Bumiputra policies are likely to continue, at least for a certain period, even after the TPP is signed.
Bumiputra is the process through which economic rents are distributed through Malaysia’s ethnic communities, with preference to Malays (as opposed to Chinese). It’s the paramount organizing principle of the Malaysian political class. Malaysia is also fabulously corrupt; they make the Thais look like paragons of good government. All of which goes to say that there is plenty of dirt to be dug up and thrown, by the Malaysian opposition, at TPP proponents — whether in Kuala Lumpur, Ho Chi Minh City, or even Tokyo and Washington.
UPDATE So will the Menendez amendment make it easier for Hillary to support TPP? Or harder?