Although the Senate Finance Committee will still have a mock markup on the U.S.-Mexico-Canada Agreement, it will happen after the implementing bill has been sent to Congress, so it will be more “mock” than in past deals. The reason the process of Congress weighing in on a trade deal is a mock markup is that under fast track, or Trade Promotion Authority, Congress cannot amend the deals. But typically, the administration sends up a draft implementing bill, and then does incorporate at least some of Congress's suggestions on language before sending the final implementing bill.
If a panel of labor experts determines that a Mexican factory is violating its workers' rights to collective bargaining, the U.S. may deny the goods from that factory the tariff benefits of the U.S.-Mexico-Canada Agreement -- but that denial of tariff benefits is not automatic.
Even though the Democrats won some changes to the new NAFTA that are seen as contrary to business interests -- primarily, removing extended patent protection for pharmaceuticals in Canada and Mexico -- business groups celebrated House Speaker Nancy Pelosi's decision to hold a vote on the trade pact. A vote in the House is expected next week, but a Senate vote won't come until next year.
International Trade Today is providing readers with some of the top stories for Dec. 2-6 in case they were missed.
It will be easier to bring a labor case under the U.S.-Mexico-Canada Agreement than it was in previous trade deals, but several particulars remain undisclosed. There will be expedited labor enforcement that “provides for facility-based enforcement,” and if independent labor experts find that collective bargaining rights weren't honored at particular factories, it will “lead to penalties,” a summary of the changes to USMCA says. But what those penalties are is not mentioned, and members of the House Ways and Means Committee and Senate Finance Committee said they don't know what they are, as no other details beyond the memo have been shared. A Ways and Means spokeswoman and trade staffer did not answer questions.
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.
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.”
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.
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."