House Speaker Nancy Pelosi and Ways and Means Chairman Richard Neal announced that they have reached a deal with the Trump administration on changes to the new U.S.-Mexico-Canada Agreement. They called the changes they won over the last six months a victory for workers. They did not share many details of how the environmental, labor, enforcement and biologics provisions changed, but said the text would be shared before votes in the House of Representatives.
Even as Republicans and Democrats on the House Ways and Means Committee asked the Trump administration to keep the World Trade Organization appellate body functioning while it pushes for reforms, the American ambassador to the WTO said Dec. 9 that the administration will not support any appellate body nominations, even as other countries agreed that the appellate body would change how it operated. More than 25 think tanks and trade groups, including the National Retail Federation and Americans for Prosperity, had also sent a letter Dec. 6 asking that the U.S. agree to the Walker Principles, named after New Zealand's ambassador to the WTO.
Unions appear ready to endorse the changes Democrats won to the NAFTA rewrite, though the most radical change -- stopping goods at the border for labor violations -- isn't in the deal. On Dec. 9, AFL-CIO President Richard Trumka said to The Washington Post, “We have pushed them hard and have done quite well,” in getting changes to the U.S.-Mexico-Canada Agreement. The House Democrats pushed for changes to the USMCA on labor, the environment, the biologics data exclusivity period and overall enforcement. If the AFL-CIO endorses their changes -- as seems likely after Trumka's comment -- passage in the House could follow quickly.
A last-minute push to tighten up the steel and aluminum segment of the auto rules of origin has angered Mexico, media reports said Dec. 6. Rep. Henry Cuellar, D-Texas, had referred to this last-minute ask as not coming from House Democrats the day before (see 1912050054). The reports say that steel unions asked for a “poured and melted” standard, rather than allowing Mexican processors to take imported slab and make it into sheet metal for cars.
Twice this week, freshman Democrats elected from traditionally Republican districts called on House Speaker Nancy Pelosi to finish negotiations on the U.S.-Mexico-Canada Agreement and hold a vote for ratification. On Dec. 4, Rep. Kendra Horn, D-Okla., joined a press release from all Oklahoma House members, and she said in that release, “Finding common ground takes hard work, and we won’t cross the finish line with finger-pointing or partisan politics. As the year comes to a close, we must find a bipartisan agreement and bring the USMCA to the floor for a vote.” On Dec. 5, Rep. Cindy Axne, D-Iowa, sent a letter to House leaders that said that while she doesn't want anything in the agreement that will cause the cost of biologic drugs to increase, and she thinks labor enforcement is important to curb outsourcing competition from Mexico, she also wants a vote before the end of the year. “Overall, Iowa is the second largest agricultural exporting state in the country,” she said, and trade wars have been hurting farmers. “Modernizing our trade agreement with our two closest neighbors is critical to ensuring market stability for Iowans.”
Sen. Thom Tillis, R-N.C., Sen. Bill Cassidy, R-La., Sen. Chris Coons, D-Del., and Sen. Mazie Hirono, D-Hawaii, introduced a bill Dec. 5 that would give CBP the authority to seize imported merchandise that is not using other companies' trademarks but is otherwise identical to a branded product. The Footwear Distributors and Retailers of America hailed the bill. “Relying on seizures based on just trademark rights is no longer effective. Counterfeiters around the world have become more creative, shipping identical looking products without the trademark and then attaching traditional trademarks after it clears U.S. customs,” FDRA said. Margo Fowler, chief intellectual property officer for Nike, was quoted in the FDRA press release about why the bill would help CBP: "It would enable them to identify and seize intended counterfeits that copy Nike’s products protected by U.S. design patents."
Texas voters send 36 members to the House of Representatives, and 18 attended a press conference Dec. 5 to say they want a U.S.-Mexico-Canada Agreement vote as soon as possible. But only one of the 13 Democrats in the Texas delegation attended -- Rep. Henry Cuellar, who represents Laredo and McAllen. Cuellar, the biggest booster of the new NAFTA in the Democratic caucus, said he'd been updated about the state of play between Mexicans and the U.S. trade representative at 9:30 a.m. that day, and “we're very, very, very close,” he said, but he said Mexicans tire of what they feel is a “one-more-thing”-style of negotiating from the Americans.
Rep. Ron Kind, D-Wis., a senior Democrat on the House Ways and Means Committee and supporter of the Craft Beer Modernization Act, said that renewing the excise tax break for alcohol producers (see 1911270048) is part of the tax extenders package the Ways and Means and Senate Finance committees are working on. He said in an interview that Democrats in the House are trying to identify spending or revenue offsets for the tax breaks that might appeal to Senate Finance Chairman Chuck Grassley, R-Iowa, “so we can move forward on it.” He said they're looking at a one- or two-year extension for the Craft Beer Modernization Act, depending on what the whole extenders package looks like.
Exactly how the U.S. Trade Representative has agreed to change the 10-year biologics exclusivity period in the U.S.-Mexico-Canada Agreement is unclear, but insiders are saying it will be less favorable to the pharmaceutical industry.
Democrats in the House insisted that their ideas about how to verify compliance with Mexico's labor laws is a balanced one that respects their sovereignty. Chief Mexican negotiator on USMCA, Jesus Seade, wrote a column published Dec. 4 that said, in Spanish, that there will be no “transnational inspectors,” even though the U.S. has pushed so much for that approach. "If the U.S. stops insisting on the pair of unacceptable ideas that the [Mexican trade group CCE] statement yesterday speaks of, we can soon have a treaty, and a very good treaty," he wrote (see 1912030033). He said that the state-to-state dispute settlement system, broken in NAFTA, "will now be 100% repaired, for all topics and sectors under the treaty."