USMCA getting a boost from Trump, business groups
Some members of Congress call for changes and there's a push to lift steel and aluminum tariffs imposed on Canada and Mexico.
WASHINGTON — The White House and business groups are stepping up efforts to win congressional approval for the US-Mexico-Canada trade accord. But prospects are uncertain given that Republicans are at odds with some aspects of the plan and Democrats are in no hurry to secure a political victory for the president.
President Donald Trump will meet with GOP lawmakers March 6 to try to kick-start the process for rounding up votes on Capitol Hill. Supporters in Congress and business groups say they have a narrow window to push it through, given that lawmakers tend to avoid tough trade votes during election season.
Rep. Earl Blumenauer, D-Ore., the chairman of the House subcommittee that has jurisdiction over trade, said the pact needs adjustments to be “worthy of support.”
Some Republican lawmakers also have concerns. Sen. Chuck Grassley of Iowa, the Republican chairman of the Senate Finance Committee, maintains that the president should lift steel and aluminum tariffs on products brought in from Canada and Mexico as a first step to getting the trade agreement through Congress.
Trump’s top trade negotiator, Robert Lighthizer, told lawmakers during a recent congressional hearing that if they don’t pass the trade agreement, the US will have “no credibility at all” with future trading partners, including China.
“There is no trade program in the United States if we don’t pass USMCA. There just isn’t one,” Lighthizer said.
The White House’s legislative affairs team has talked to more than 290 members of Congress and staff over the past two months to push the deal. But the administration knows that making changes in the agreement to win over lawmakers could jeopardize support for the pact from Canada and Mexico.
Sen. Joni Ernst, R-Iowa, told reporters recently that many in her state’s agricultural community are “still with the president, but if we don’t get the trade deals done, they could turn quickly.”
She said, “We need to start wrapping this baby up.”
The trade deal is designed to supplant the North American Free Trade Agreement, which took effect in 1994 and gradually eliminated tariffs on goods produced and traded within North America.
US trade with its NAFTA partners has more than tripled since the agreement took effect, and more rapidly than trade with the rest of the world.
But Trump has called NAFTA a disaster for the US. The new pact his administration negotiated is meant to increase manufacturing in the US. Trump is warning that if lawmakers don’t approve the pact, the US may revert to what he has described as “pre-NAFTA.”
Blumenauer is looking to make changes to the agreement in four areas: enhancing environmental and labour protections, ensuring enforcement of the agreement, and taking on protections for pharmaceutical companies that he believes drive up drug costs for consumers.
“I don’t think anyone wants to blow it up, but there is interest in strengthening it,” Blumenauer said.
Rep. Vern Buchanan of Florida, the ranking Republican on the trade subcommittee, said he believes the vast majority of Republicans will end up voting for the agreement. He’s tried to assure Democratic colleagues that Republicans were “open-minded to try and get some things done” to address their concerns.
“You put a lot of jobs at risk if this blows up,” Buchanan said.
Vanessa Sciarra, a vice-president at the National Foreign Trade Council, said it’s too soon to tell how the vote will shake out.
Sciarra said one thing lawmakers don’t want to see is Trump make good on a threat to withdraw from NAFTA if he can’t get Congress to ratify the pact.
“Never has NAFTA been so popular,” Sciarra said.
Canadian officials have been lobbying the US to end Trump’s steel and aluminum tariffs and have suggested that approval by Canada’s Parliament could be conditioned upon them being lifted. David MacNaughton, Ottawa’s ambassador to Washington, has said it will be a tough sell to pass if the tariffs are still in place.
Dan Ujczo, a trade lawyer and Canada-US specialist in Columbus, Ohio, said the trade deal could pass “relatively quickly” once the tariffs are removed.
In Mexico, the administration of then-President Enrique Pena Nieto spearheaded Mexico’s negotiations, but representatives of current President Andres Manuel Lopez Obrador were deeply involved in the talks to ensure an agreement that both the outgoing and incoming administrations could live with.
Allies of Lopez Obrador, who took office Dec. 1, enjoy a large majority in the Mexican Senate, so passage of the agreement would seemingly go smoothly.
Kenneth Smith Ramos, who was chief negotiator for Pena Nieto’s government and now works as an international trade consultant at Mexico City-based AGON, said Mexican enthusiasm for the deal could dim though if there are significant new demands on labour, pharmaceuticals, the environment or other issues.
“We made some important concessions,” he said, adding that if “the US still wants more, then that starts to unbalance the agreement and there may be a growing opposition in Mexico.”
Associated Press writers Lisa Mascaro in Washington, Rob Gillies in Toronto and Peter Orsi in Mexico City contributed to this report.