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Photograph by Saul Loeb — AFP/Getty Images

Senate Dems deliver major setback to Obama’s trade agenda

May 12, 2015

President Obama’s trade agenda suffered a humbling setback at the hands of his own party Tuesday afternoon when Senate Democrats united to deny him negotiating authority to hammer out pacts with foreign governments.

Democrats are split on the biggest looming deal, the Trans Pacific Partnership, which aims to cement trading ties among 12 countries around the Pacific Rim. But Senate Democrats, with the exception of Delaware Sen. Tom Carper, hung together Tuesday afternoon to block debate on handing Obama so-called trade promotion authority, a procedural maneuver that would let him submit a final pact for a straight up-or-down vote in Congress.

The defeat for the White House was especially stunning because it was delivered by the Senate, traditionally the more trade-friendly of the two chambers. Indeed, trade watchers have expected Obama’s push for new agreements to face its toughest test in the House, where it’s been far from clear whether the administration can muster a winning margin.

Now, before it can even get there, the White House will need to untangle a gnarly knot in the upper chamber: Democrats revolted over a decision by Senate Majority Leader Mitch McConnell (R-Ky.) not to include in the package an enforcement provision targeting Chinese currency manipulation and another measure dealing with African trade. McConnell, for his part, said those issues could be addressed on the floor — an assurance that failed to satisfy Democrats. On the way forward, Senate Finance Chairman Orrin Hatch (R-Utah), who shepherded the bill to the floor, said, "I have no idea."

The pressure now appears to fall back on the White House to find a way to get Senate Democrats back in line and salvage a priority that Obama views as key to his economic legacy. The debate has already opened an uncharacteristically bitter rift between Obama and the anti-trade leftwing represented by Sen. Elizabeth Warren (D-Mass.). A Warren ally in the trade battle, Ohio Sen. Sherrod Brown, told reporters after the Tuesday vote that the President has been “disrespectful” to Warren by singling her out and diminishing her criticism. “I think the President’s made this more personal than he needed to,” Brown said.

For more about trade, watch this Fortune video:

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