Deputy US trade czar conscripts American mayors to lobby for USMCA

WASHINGTON — One of the hard-bargain drivers from the American side of the NAFTA negotiating table is bringing his powers of persuasion to bear on the next challenge facing the new North American trade pact: the US Congress.

Deputy US Trade Representative C. J. Mahoney, a fixture of the 14-month negotiation process that culminated last October in the US-Mexico-Canada Agreement, urged a gathering of American mayors Jan. 23 to lobby Capitol Hill lawmakers to ratify the deal.

“All Congress has to do is pass it, and that is where I hope you all can help us,” Mahoney told a panel discussion during the winter meeting of the United States Conference of Mayors in Washington.

“You all have influence on your members of Congress. They listen to you, they understand your problems, they know that you’re looking out for what’s good for your communities and are concerned first and foremost with jobs and economic development.

“We need your help.”

Ratification in both Mexico and Canada has largely been seen as inevitable; Martha Barcena Coqui, Mexico’s ambassador to the US, told the panel she expects the agreement to come to a vote in the next session of her country’s Congress, which gets underway next month and which doesn’t require a separate implementation bill. In Canada, the majority Liberal government makes a Yes vote all but a foregone conclusion.

But amid political turmoil in Washington – where the White House is at war with Democrats over President Donald Trump’s border wall plans and a partial government shutdown has entered its second month – nothing these days is a given.

A number of prominent Democrats – notably House Speaker Nancy Pelosi, currently the most painful congressional thorn in Trump’s side – have complained that the deal lacks meaningful mechanisms to enforce new labour and environmental standards. And relations between Capitol Hill and the White House are at such a low ebb that some fear the president’s enemies are determined to deny him any political wins.

Enter Mahoney, who is hard-selling the USMCA as a win for all three countries.

“If members of Congress can put politics aside and focus on the substance, I have no doubt that this will pass overwhelmingly in both houses,” he said, describing the deal as the most bipartisan U.S. trade deal ever negotiated, thanks to the political foresight of his boss, U.S. Trade Representative Robert Lighthizer.

“Throughout the negotiations – well before the results of the midterm elections were known – we worked very closely with Democrats to ensure that the final agreement reflected their priorities,” he said, citing the labour and environmental clauses in particular.

To qualify for duty-free benefits, USMCA requires autos to contain 75% North American content – up from 62.5% under NAFTA. By 2023, between 40% and 45% of auto parts will also have to come from workers earning at least $16 an hour; in Mexico, auto assembly workers earn an average of just $7.34 an hour and parts workers $3.41 an hour.

On the environmental side, the agreement includes a number of protections for marine species and habitats, new air-quality standards, environmental assessment rules and forest management practices.

“I’m optimistic about our chances of success in this endeavour, but success is certainly not assured,” Mahoney said. “Given the importance of the agreement to our workers, farmers and ranchers, the stakes could not be higher.”

Paul Dyster, the mayor of Niagara Falls, NY, told Mahoney the often-acrimonious negotiating process has had a negative impact on his community’s economic prospects, given how closely integrated it is with Canadian interests.

“The rhetoric that was used in this negotiation was shocking, when you hear it used in reference to the leaders of countries that have been your strongest allies and trade partners for a long time,” Dyster said.

“For those of us on the border, whose economies are very fully integrated with the Canadian economy, that use of old-fashioned protectionism to try to advance the interests of the United States to take a shot at Canada – it kind of hit us in the foot.”

Mahoney, however, dismissed any suggestion of lingering bad blood.

“What really matters is not the given press headline at any point during the negotiations, but where we ended up – and where we ended up was with a great agreement that I think will be the foundation for an even stronger relationship with Mexico and Canada going forward.”

Canada’s ambassador to the US, David MacNaughton, who joined the panel after Mahoney had left, raised one particular sticking point: the fact that the Trump administration has not yet made good on its commitment to lift its punishing national-security tariffs on steel and aluminum exports.

“This is causing distortions in the marketplace, it is causing all three countries to lose opportunities, it is increasing costs for consumers,” said MacNaughton, who closed by quoting the president’s own tweet from March 2018 committing to lifting the tariffs once a new trade agreement was in place.

“He has now said this is a fair deal, a good deal, the best deal that’s ever been done, so I would simply say please, let us get on with building our three countries together. Let us get on with our defence and security agreements and the relationship that we have had for more than 150 years.”