It’s been more than two months since U.S. negotiators signed a deal to redo the North American Free Trade Agreement (NAFTA) with their counterparts in Mexico and Canada. Now comes an even tougher next step: Winning approval in Congress.
First signed in 1993 by then President Bill Clinton, NAFTA gradually eliminated many tariffs and other trade barriers on products and services moving between the three countries. But there were still challenges with many agricultural products, including dairy, wheat and wine trade with our Canadian trading partners.
President Donald Trump came into office last year determined to drop trade restrictions and change many other parts of NAFTA, which he’s now renamed the U.S., Mexico and Canada Agreement (USMCA).
Trump used his recent State of the Union speech to call on Congress to ratify USMCA, but negotiations have yet to truly begin, says Rep. Kevin Brady, the top Republican on the House Ways and Means Committee.
“We are beginning the process for educating and briefing members on the agreement – getting their feedback," Brady said recently at a Washington International Trade Association event. “The short answer is it should be approved because it has some really solid wins for us. …Are there some areas where members have raised concerns? Yes.”
U.S. Trade Representative Robert Lighthizer has been meeting in recent weeks with influential lawmakers like Brady, House Agriculture Committee Chairman Collin Peterson, D-Minn., and Rep. Ron Kind, D-Wis. But Ways and Means Chairman Richard Neal, D-Mass., told reporters that House Democrats want to know what Lighthizer and Trump are willing to give them to “alleviate some of the tensions” they have over issues like enforcement of labor and environmental provisions in USMCA.
Democrats are generally pleased over the addition of new labor protections in USMCA that are supposed to push up autoworkers’ wages in all three countries as well as give Mexican union members access to collective bargaining that is independent from historically government-run negotiations.
A primary concern of Democrats is that the new provisions, including a mandate that 40-45 percent of cars be produced by workers making a minimum of $16 per hour, won’t be uniformly enforced.
“I think there’s been improvement as far as labor standards are concerned, but it does come back to enforceability and whether there’s any teeth behind those standards,” Kind said.
Brady insists the Trump administration is sincere in its desire to appease Democrats.
“What will Democrat demands be on the enforcement?” he said. “What does that look like? I think Ambassador Lighthizer is eager to see what that to-do list is to figure out how he can accommodate them, if at all. And he’s sincere about doing that.”
Democrats will also be looking to the unions and one of the biggest — the International Brotherhood of Teamsters – is still not committed to a position on USMCA. Last year, Teamsters General President Jim Hoffa said he wasn’t prepared to either support or oppose the pact and that’s still the case, a spokesman told Agri-Pulse.
But Peterson tells Agri-Pulse that he is hearing nothing but optimism from the administration.
“I had lunch with Lighthizer. … He said they’re working on putting the votes together,” Peterson said. “He claims some (unions) are going to come out and support (USMCA).”
While Democratic concerns have been some of the most visible obstacles to USMCA passage, Republican criticisms may be some of the most potent, says Senate Finance Committee Chairman Chuck Grassley, R-Iowa. He says he would not introduce the USMCA implementing legislation on the Senate floor unless the Trump administration scraps the import taxes on steel and aluminum.
“That’s what I’ve said,” he told reporters. “That’s not a threat. That’s just a practical way to get things done around here.”