President Donald Trump, speaking at a fracking conference in Pennsylvania, first said that Democrats don't want to put the NAFTA rewrite up for a vote, then said, "But I think they're going to put it up because everybody wants it, and I think ultimately, they're going to do the right thing."
USMCA
The U.S.-Mexico-Canada agreement is a free trade agreement between the three countries, also known as CUSMA in Canada and T-MEC in Mexico. Replacing the North American Free Trade Agreement (NAFTA) in 2020, the agreement contains a unique sunset provision where, after six years (in 2026), any of the three parties may decide not to continue the agreement in its current form and begin a period of up to 10 years where USMCA provisions may be renegotiated.
USMCA Working Group Members' Mood After Meeting Diverges; Caucus Is Hearing Biologics Solution Found
Some members of the Democrat working group tasked with getting edits to the new NAFTA said it's going well after the latest meeting, but others emphasized how delicate it is, and how parsing the words is essential to satisfying Democrats' concerns with the deal.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, one of the few Republicans in Washington who has not criticized House Democrats for spending months negotiating for changes to the U.S.-Mexico-Canada Agreement, told reporters Oct. 22 he recently started to worry about time running out.
House Trade Subcommittee Chairman Earl Blumenauer, D-Ore., a member of the working group working to get changes to the new NAFTA to suit Democrats, said "there's been some hiccups" in negotiations with the administration, but a deal is achievable if the administration wants it. "Everybody's trying to figure out how to do it," he said. And, given the amount of staff work, and the pace of meetings -- two this week with U.S. Trade Representative Robert Lighthizer -- if the Democrats and USTR don't reach agreement "it's not going to be for lack of effort."
House Speaker Nancy Pelosi said she's optimistic the administration and trading partners will be able to reach agreement on enforceability that will allow the House to proceed with a vote. Pelosi, speaking at a press conference Oct. 17, said the working group is "making progress every day." She also said that the agreement has to be respectful of global agreements on the environment, and she hopes the provisions on biologics can be resolved to the satisfaction of Democrats. "That's a very big issue in our caucus," she said.
House Ways and Means Committee Chairman Richard Neal, D-Mass., said Mexico has made "another significant step forward" by promising to fully fund new labor courts that will be integral to major labor reform in that country. Neal said he, fellow working group member Rep. Jimmy Gomez, D-Calif., and committee member Rep. Bill Pascrell, D-N.J., met with the Mexican president for an hour and 45 minutes during the recess, an hour longer than scheduled.
About 350 companies, trade associations and local manufacturing groups and chambers of commerce are urging Congress to ratify the United States-Mexico-Canada Agreement "as soon as possible this autumn." The letter, led by the National Association of Manufacturers and signed by giants like Ford, GM, Fiat Chrysler, Caterpillar, IBM, GE, Honeywell, Bayer and Bristol-Myers Squibb, was sent Oct. 15. It said that ratification "is essential to promoting certainty and growth for manufacturing businesses." Volvo North America and Mahindra Automotive America signed the letter, but BMW and Mercedes -- whose supply chains would likely have to change to meet stricter rules of origin -- did not. The letter referred to trade facilitation -- though not explicitly higher de minimis levels in Canada and Mexico, in saying that the USMCA will eliminate red tape at the border, and make "it easier for small and medium-sized businesses to sell into these critical markets."
The conventional wisdom in Washington is that a House ratification vote for the new NAFTA can be held before Thanksgiving, according to Dan Ujczo, chairman of Dickinson Wright's cross-border law practice. Ujczo, whose firm works with auto manufacturers and who follows the politics of North American trade closely, said when his clients did fly-ins, Republicans, trade associations, and Democrats outside the Progressive Caucus all said that. But Ujczo doesn't think that's true.
Business and labor leaders and government insider panelists agreed that the U.S.-China trade war will be difficult to unravel, but disagreed on how quickly Democrats could -- or should -- resolve outstanding issues on the NAFTA rewrite. The trade panel Oct. 10, hosted by Fiscal Note, included Clete Willems, former White House deputy assistant to the president for international economics, who said that although it pained him to say it, "The political conditions in both countries are just not conducive to the big deal."
Many Republicans in Congress have been accusing House Speaker Nancy Pelosi of dawdling on ratifying the new NAFTA, and White House trade adviser Peter Navarro said that if it doesn't come to the floor of the House by the end of October, "I don't think we're gonna get it."