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Why Trump Still Can’t Get USMCA Through Congress
Ironically, the fight over impeachment could finally ease the way for NAFTA’s successor. But time is running out.
With the impeachment inquiry gaining momentum seemingly every day, U.S. President Donald Trump is desperate for some sort of victory. That’s why the administration has stepped up pressure on the Democratic-controlled House of Representatives to pass the revised North American Free Trade Agreement (NAFTA), which the United States, Mexico, and Canada negotiated last year. House Speaker Nancy Pelosi has repeatedly said she’s hoping to pass the agreement—but only after core, long-standing Democratic concerns are addressed. With just a few weeks left in this year’s congressional calendar, prospects for passage of the U.S.-Mexico-Canada Agreement (USMCA) seem to be dimming by the day.
Is the impeachment probe holding up the trade deal?
Trump has attacked Democrats by arguing that the impeachment probe shuts down legislative deliberation, and he took to Twitter on Tuesday to prod Pelosi into getting a vote on the trade deal—the only partial victory Trump has achieved in almost three years of trade policy turmoil. “Can’t believe that Nervous Nancy Pelosi isn’t moving faster on USMCA,” Trump tweeted. “Taking too long!”
But the impeachment inquiry isn’t what’s holding up passage of USMCA, even though many Democrats were (and still are) leery of giving Trump a political victory. First, the White House has yet to send any actual implementing legislation to Congress to turn the deal from an agreement into law. But Pelosi has made clear from the beginning of the impeachment probe that the House deliberation of USMCA would move ahead, and last week she stressed her willingness to push harder to pass the trade deal despite the bad blood with the White House over impeachment. In a way, impeachment could make an eventual USMCA deal even likelier, as Trump needs a win and Democrats are eager to show they can still deliver important legislation while investigating the president.
Then why is it taking so long? Mexico ratified the agreement last summer.
Since Trump’s trade negotiators wrapped up their revisions to the 25-year-old NAFTA in 2018, Democrats have been clear about the concerns they wanted addressed before they could vote yes: They want greater enforcement provisions, stronger labor and environmental protections, and a change to pharmaceutical protections. Those are pretty much the same criticisms many Democrats had about the original NAFTA.
Lately, another hot-button issue has elbowed into the debate over the trade agreement: Whether technology companies will be held liable or not for the content they publish. Tech firms are shielded under U.S. law, and those protections would be extended internationally in the agreement—and that worries both Democratic and Republican lawmakers. Enshrining the decades-old tech liability shield in an international agreement would make it almost impossible for Congress to take any future action to regulate big tech firms’ role in spreading misinformation and disinformation—a huge issue heading into an election year already marred by information warfare.
From the beginning, Trump’s trade team, led by Robert Lighthizer, has been meeting with Congress to assuage lawmakers’ concerns and try to make just enough tweaks to ensure passage of the agreement; Lighthizer met again Wednesday with key Democrats. The problem is that many of the Democratic concerns, which are shared by environmentalists and labor groups, seem hard to address without going back and making changes to the USMCA text, which neither Mexico nor Canada wants. (Passage in Canada’s new parliament is all but a “foregone conclusion” but only after the U.S. Congress moves on the agreement.)
“I don’t know how you fix the pharmaceutical issue or digital or the question of enforcement without reopening the text,” said Kimberly Ann Elliott, a trade expert at the Center for Global Development. “My impression is that Pelosi does want to do it—but I don’t have a strong sense of how Lighthizer can square the circle on the things the Democrats want to see.”
Why are House Democrats hung up on labor issues? Trump says unions love the deal.
Not quite. While some unions, such as the Teamsters, have praised the USMCA as an improvement over its predecessor, most of Big Labor has voiced the same concerns about USMCA as it did about the original NAFTA and about the doomed Trans-Pacific Partnership. The AFL-CIO, in particular, has barnstormed around the country’s manufacturing belt to raise awareness of the need for the new trade pact to genuinely address concerns about unfair competition. And AFL-CIO boss Richard Trumka warned flat out this month that any effort to rush a congressional vote to suit a desperate White House would be a “colossal mistake.”
The new trade pact does address many of the concerns about labor rights—especially in Mexico. That includes greater union protection and higher minimum wages, a way to hopefully limit the offshoring of U.S. manufacturing jobs. And the labor provisions, in theory, are among the easiest to address. The new Mexican government overhauled its labor laws and raised wages. But Democratic lawmakers still worry about the staying power of Mexico’s labor reforms—especially after the latest Mexican budget slashed money dedicated to labor enforcement.
That’s why Mexican President Andrés Manuel López Obrador sent a letter last week to the powerful head of the House Ways and Means Committee trying to show that Mexico was on the path to deep-seated and genuine labor reform, even if he explained that it would take several years to fully complete.
So what are the prospects for getting USMCA through Congress?
It’s starting to look difficult this year, with just over 20 days left in the congressional calendar, Democratic concerns still not fully addressed, and no implementing bill for Congress to work on. Iowa Sen. Chuck Grassley, the chairman of the Senate Finance Committee and a powerful Republican voice on trade, said Tuesday that he is worried for the first time about the trade deal passing. “I think it’s fair to say that the clock is ticking and time is running out,” he told reporters.
The problem is that if House Democrats can’t get their concerns addressed, and Big Labor stays on the sidelines, there’s no way Pelosi can advance the legislation this session. And after this year, the 2020 election kicks into full gear. And almost nobody thinks that Congress can pass contentious trade legislation in the middle of a heated presidential election. Which would push back congressional consideration of Trump’s one big trade win until after the election—if even then.