Congress victory moves Obama's Pacific trade pact forward

WASHINGTON (Reuters) - Legislation vital to securing the largest U.S. trade deal in decades was passed by the Senate on Wednesday by a comfortable margin, advancing President Barack Obama's efforts to strengthen U.S. economic ties around the Pacific Rim.

After a six-week congressional battle including two brushes with failure, some fancy legislative footwork and myriad backroom deals to keep the legislation alive, the Senate voted 60 to 38 to grant Obama "fast-track" power to negotiate trade deals and speed them through Congress.

The bill next goes to the president for his signature.

That could propel the 12-nation Trans-Pacific Partnership (TPP), a central element of Obama's foreign policy pivot to Asia, over the finish line, while also boosting hopes for completing an ambitious trade deal with the European Union.

U.S. labor groups, which fought fast-track, said they will redouble their efforts. "We will vigorously oppose TPP if it continues on its current course," AFL-CIO President Richard Trumka wrote in a letter to lawmakers.

The TPP, potentially a legacy-defining achievement for Obama, would be the biggest free trade agreement in a generation and rank with the North American Free Trade Agreement, which liberalized trade between the United States, Canada and Mexico, while also serving as a counterweight to the rise of China.

To complete the TPP, ministers of the various countries involved still have tricky issues to resolve, ranging from monopoly periods for next-generation medicines to the treatment of state-owned enterprises.

Some countries, including Japan and Canada, wanted fast-track to be approved before making final offers on the trade deal, which would cover 40 percent of the world economy and raise annual global economic output by nearly $300 billion.

Negotiators say a deal on the TPP could be wrapped up within weeks once countries are sure that Congress will not pick the deal apart, which fast-track would prevent.

"We are optimistic that (fast-track) will lead the way for many new market-opening agreements, including the Trans-Pacific Partnership,” said Doug Oberhelman, chief executive of Caterpillar Inc , which welcomed the vote of approval, as did technology companies Intel Corp and International Business Machines Corp , and insurer Metlife Inc .

WORKER AID BILL

Fast-track authority, letting lawmakers set negotiating goals for trade deals but restricting them to yes-or-no votes on final agreements, will last for up to six years and will extend to any trade deals negotiated by Obama's successor, who would take office in January 2017.

Wednesday's vote came as Congress was trying to finish up four parts of a trade legislation package: fast-track negotiating authority, aid for workers who lose their jobs as a result of trade, an Africa trade preferences bill, and a customs enforcement measure.

Fast-track was forced back to the Senate floor after a revolt by Democrats in the House of Representatives resulted in it being split from the worker aid measure.

That bill received unanimous approval and now will return to the House, where many Democrats who previously opposed the aid program now plan to support it. Their initial opposition was part of a ploy that failed to derail fast-track legislation.

Passage of worker aid in the House on Thursday would allow both measures to go to Obama for approval this week, before lawmakers go on a week-long break.

The bruising congressional battle pitted Obama against many in his own party, including House Democratic leader Nancy Pelosi, and prompted blood-letting among Republicans after party leaders lashed out at conservatives who refused to back the trade agenda.

Opinion polls show a majority of Americans support trade in general, but congressional approval has been a slog given pressure from unions and activists warning of job losses and vowing to retaliate against Democrats who support trade.

The front runner for the party's presidential nomination in 2016, Hillary Clinton, said Democratic critics had legitimate concerns but has so far reserved judgment on the TPP.

(Editing by Kevin Drawbaugh)