Although the list of members on a working group to improve the new NAFTA isn't yet final, the co-chairs of the Congressional Progressive Caucus say they expect to be dissatisfied with the mix of views on it. "I know he did want to know who to negotiate with," said Rep. Mark Pocan, D-Wis., referring to U.S. Trade Representative Robert Lighthizer. And Pocan said it makes sense that the task force would predominantly be drawn from the Ways and Means Committee, which is responsible for trade deals. But Pocan told International Trade Today, "We also want to make sure we're heard." Pocan said he thought Rep Rosa DeLauro, D-Conn., could be on both task forces. "I do expect she would be on every committee if she wants to, because we all love Rosa, and this has been a passion she's had for a long time."
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.
President Donald Trump may institute tariffs on goods from Mexico after withdrawing them if the Mexican legislature doesn't approve a part of the deal between the two countries, he said in June 10 tweets. "We have fully signed and documented another very important part of the Immigration and Security deal with Mexico, one that the U.S. has been asking about getting for many years. It will be revealed in the not too distant future and will need a vote by Mexico’s Legislative body!" he said. "We do not anticipate a problem with the vote but, if for any reason the approval is not forthcoming, Tariffs will be reinstated!" The two sides reached a deal on June 7 to avoid the tariffs (see 1906070081) with Mexico agreeing to play a bigger role in handling of migrants from Central America who seek asylum in the U.S., the two countries said in a June 7 joint statement.
House Majority Leader Steny Hoyer, D-Md., at a press conference with reporters June 4, said imposing tariffs on Mexico could affect the fate of the NAFTA rewrite in Congress but also suggested the discussions on how to fix the NAFTA rewrite can continue even under this cloud.
Members of Congress are hoping that President Donald Trump won't follow through with his threat, but are also talking about how they might respond if he does impose 5 percent tariffs on all Mexican imports.
Although the Speaker of the House said the administration's decision to send over its Statement of Administrative Action and legal text of the U.S.-Canada-Mexico Agreement was "not a positive step," some NAFTA watchers said this should not be seen as a sign that the administration is trying to force the speaker's hand and demand a vote before the August congressional recess.
The U.S. Chamber of Commerce said it is considering suing the Trump administration over its use of the International Emergency Economic Powers Act to levy tariffs on all Mexican imports beginning June 10. The administration said it will start at 5 percent, and if Mexico does not do more to stem the flow of Central American migrants to the U.S., it will raise that tariff to 10 percent July 1, then increase it by 5 percent each month until it reaches 25 percent Oct. 1.
Trade Works for America, one of several coalitions lobbying for ratification of the U.S.-Mexico-Canada Agreement, already has met with more than 50 Congress member offices, both Republicans and Democrats. But Marie Sanderson, a senior adviser for the coalition and former policy director for the Republican Governors Association, said it's just as important to educate constituents in swing districts and some Republican districts about the benefits of the revised NAFTA.
The Trump administration tried for months to insist that Mexico and Canada accept quotas on their steel and aluminum, and the fact that the administration lifted its tariffs on those metals on its NAFTA partners without any import restrictions shows "just how much the Administration has invested in passage of the USMCA," wrote Ted Murphy, managing partner of the Baker McKenzie office, in a blog post.
Section 232 steel and aluminum tariffs on Canada and Mexico are going away, the U.S. said May 17. They will be lifted from Canadian imports within 48 hours, but the Mexican government has not indicated timing for the relief there, and the Commerce Department did not respond to an inquiry by press time. Canada and Mexico will lift their retaliatory tariffs, which hit U.S. prepared food, agriculture and metals, at the same time the U.S. tariffs end.
House members that are leaders on trade, in the center and on the left, say that U.S. Trade Representative Robert Lighthizer is recognizing the ways he's going to need to change the new NAFTA to get Democratic votes, but it's not yet clear how far he'll be willing or able to go. Wisconsin's Rep. Ron Kind, a New Democrat and free trader, said in a hallway interview with International Trade Today May 10, "We're kind of at an impasse. They keep telling us there's no way they can open this up and tweak it, and make this minor adjustment and we're saying ... we haven't met a trade agreement yet where members of Congress weren't allowed to get our fingerprints on it a little bit, massage it here and there for it to get to 218 [votes]. So, until somewhat blinks on that front ... ."