WASHINGTON - The discovery of scores of graves in people-smuggling camps in Malaysia is casting a shadow over President Barack Obama's signature trade deal as US lawmakers consider punishing trading partners that are soft on human trafficking.
Just as Obama's drive to win "fast-track" trade negotiating authority for the deal entered its most sensitive stage in the US Congress, Malaysian police announced the discovery of 139 graves in jungle camps used by suspected smugglers and traffickers of Rohingya Muslims from Myanmar. "This new information is very alarming," Democratic Senator Robert Menendez told Reuters, referring to the burials in the Southeast Asian country that is part of a massive Pacific trade pact that Obama wants to complete this year.
Menendez said he no longer intended to back a compromise he helped craft that would let Malaysia and other countries appearing on a US black list for human trafficking participate in fast-tracked trade deals under certain circumstances.
That compromise would have replaced Menendez's tougher language, currently in a Senate-passed bill pending in the House of Representatives, which would bar from fast-tracked trade deals Malaysia and all other countries who earn the worst US human trafficking ranking.
Trade experts consider the stricter language a "poison pill"that could condemn the entire Trans-Pacific Partnership (TPP) to a laborious congressional approval process.
It would mean that trade deals with countries that have the lowest "Tier 3" ranking on trafficking from the State Department cannot be fast tracked, so either the TPP could not be expedited or Malaysia would have to leave.
The Menendez compromise was never voted upon in the Senate. By backing away now, he hopes to build support in Congress for maintaining his original, tougher language. "I'd like to try if it's possible to keep it as it is," said Menendez.
Having fast-track negotiating authority in place would allow Obama to negotiate the TPP, which links a dozen countries and covers 40 per cent of the world economy, knowing Congress only has a yes-or-no vote and could not pick the deal apart.
The White House is working with Republicans on a legislative sleight-of-hand that would allow the House to vote on the fast-track bill containing the tougher language, betting it will be overridden by softer language that they advance in companion trade legislation.
But opposition from Menendez - an influential voice on foreign affairs who backed two of three major trade deals in 2011 - and other lawmakers could make that more difficult. Most of Obama's Democratic Party and some Republicans are opposed to fast-track.
House Democratic leader Nancy Pelosi supports the original language and believes it is "an important step in advancing the debate over human rights as the TPP is negotiated," her spokesman said.
The Malaysia revelations come as the US State Department prepares to release its annual human trafficking scorecard this month and decide whether to keep the country at Tier 3 following a downgrade last year.
The discovery of the graves puts pressure on the State Department to keep Malaysia on Tier 3, but it's no sure bet it will. The State Department draws a distinction between smuggling and trafficking. Smuggling, done with the consent of those involved, differs from trafficking, in which people are trapped by force or deception into labour or prostitution.
While the graves were found in an area long known for the smuggling of Rohingya and local villagers reported seeing Rohingya in the area, Malaysia's Deputy Home (Interior) Minister Wan Junaidi Tuanku Jaafar has said it's unclear whether those killed were illegal migrants or legal foreign workers.
"THE MALAYSIA FIX"
The State Department would need to show that Malaysia has neither fully complied with minimum anti-trafficking standards nor made significant efforts to do so to justify keeping Malaysia on Tier 3.
Malaysia has an estimated two million illegal migrant laborers, many of whom work in conditions of forced labour under employers and recruitment companies in sectors ranging from electronics to palm oil and domestic service.
Among the 12 TPP countries, Brunei has also come under attack by human-rights groups for adopting Islamic criminal law, which includes punishing offences like sodomy and adultery with the death penalty, including by stoning. Vietnam's Communist government has been criticised for jailing dissidents.
The trade battle could peak in the deeply divided House around mid-June if Republican House Speaker John Boehner estimates there are enough votes to pass a bill that he favors.
For many wavering lawmakers, the main worry is the economic impact the deal would have on their home districts.
Behind the scenes, House Republican leaders and the White House, which sees trade deals as a way to engage trading partners in debate on issues like human rights, have worked hard on what some were calling "the Malaysia fix" to soften the language.
The Republican chairman of the House Ways and Means Committee, Paul Ryan, said the original language would unfairly punish other TPP partners, such as Japan and Australia, and the issue was best dealt with in a customs enforcement bill that is intended to move through Congress along with fast-track. "We shouldn't confer Malaysia's sins to these other countries that we're trying to get agreements with," he told reporters.
Some House Democrats said neither the original Menendez language nor the compromise version are enough. "Congress should insist that Malaysian laws and practices change to meet international standards before we vote on TPP,"said Sander Levin, a senior House Democrat.