The new NAFTA will reverse outsourcing decisions in the auto industry, the U.S. Trade Representative's annual report on the trade agenda said, and one of the administration's top priorities for 2019 is to get Congress to ratify it. The report, which spends 26 pages on this year's agenda and the rest laying out the status of current free trade agreements, negotiations and enforcement actions during 2018, was released late March 1. Generally, the report defended the administration's actions, arguing they're not protectionist but rather pro-worker, and noting that both imports and exports grew in high single digits during the first 11 months of 2018.
Although the main topic of the hearing was China, U.S. Trade Representative Robert Lighthizer told House Ways and Means Committee members repeatedly Feb. 27 that if they don't ratify the U.S.-Mexico-Canada Agreement, there will be no trade agenda for the next several years. "If we don’t pass USMCA, it says we don’t have a consensus," he said. Lighthizer also said: "It’s clearly better than its predecessor, it’s no question. Millions and millions of people are affected [by NAFTA]. You just have to pass it."
The U.S. Chamber of Commerce-organized USMCA Coalition launched Feb. 26, with many of the major trade players -- UPS, the Detroit automakers, the farm bureau, the American Apparel and Footwear Association -- and some notable absentees -- foreign automakers, aerospace firms.
Kentucky Gov. Matt Bevin says there shouldn't be steel and aluminum tariffs on Canadian products, but expressed confidence that the Trump administration will make the situation right eventually. Bevin is a Republican who leads a state that is third-highest in auto industry jobs as a proportion of the workforce. "I wish people would just have patience," he said at a Feb. 21 event sponsored by the Canadian American Business Council. He suggested the reason the tariffs are still in place is "there's a limited amount of bandwidth" at the Office of the U.S. Trade Representative, and they have "a limited amount of ability to fight all these fires at once."
Jerry Dias, national president of Canada's UNIFOR syndicate, said that before NAFTA, Canada had a small trade surplus in goods with the world, but now it has a $120 billion deficit. He said that General Motors, while closing plants in Canada, doubled its capacity in Mexico. Mexican consumers buy 240,000 GM vehicles a year, and Mexico is on the cusp of producing 1 million vehicles, he said. "And guess where those jobs come from? Canada and the United States." Dias said Canada has lost 500,000 manufacturing jobs in the nearly 25 years that NAFTA has been in place. "Tell me why I should celebrate?"
An alliance of trade groups and business groups -- including PhRMA, the National Chicken Council and the International Association of Drilling Contractors -- is funding the Pass USMCA Coalition, which will lobby for ratification of the new NAFTA, called the U.S.-Mexico-Canada Agreement. Rick Dearborn, former deputy chief of staff for President Donald Trump, is executive director of the group, and former Obama administration Commerce secretary Gary Locke is honorary chairman.
The approach to a future bill that would give Congress the ability to intervene on Section 232 tariffs will depend on what version can get the broadest bipartisan support, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told reporters Feb. 13. He said he doesn't have his mind made up on what has to be in the bill to constrain Section 232 actions. He said his staff is "moving very quickly" to put together a bill that "shows the appropriate respect to [Sen. Pat] Toomey and to [Sen. Rob] Portman," Republican committee members who have each authored bills that would constrain the president on the tariffs (see 1901310029 and 1902120033)
International Trade Today is providing readers with some of the top stories for Feb. 4-8 in case they were missed.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said that neither Mexican nor Canadian politicians will ratify the new NAFTA as long as those two countries are subject to U.S. Section 232 steel and aluminum tariffs. Grassley, who was speaking to reporters on a conference call Feb. 12, has said in the past that Canadian and Mexican retaliatory tariffs reacting to those tariffs have to be lifted in order to get the new NAFTA through Congress (see 1901090041).
Rep. Rick Larsen, D-Wash., said he is skeptical that a formal agreement on trade will be reached in the U.S.-China talks, citing what he called the Trump administration’s lack of “patience,” and that while some features of the renegotiated NAFTA remain in contention, he senses that more in Congress are comfortable with the language.