Next to immigration, US trade policy is one of the top priorities of President Trump. Winning congressional approval of the US-Mexico-Canada trade agreement (USMCA), which his administration negotiated, is a key plank of Trump’s 2020 presidential election agenda.
House Democrats, led by Speaker Nancy Pelosi, are the major obstacle for Trump’s ambition. Pelosi took steps this week to begin negotiations with Trump’s trade advisers and she put two members of the Oregon congressional delegation in pivotal leadership positions. She also signaled support for a labor enforcement proposal championed by Oregon Senator Ron Wyden.
Oregon Congressman Earl Blumenauer will co-chair a team focused on drug pricing, while Oregon Congresswoman Suzanne Bonamici will co-chair the team examining environmental issues.
Pelosi hasn’t committed to a House floor vote on the USMCA until changes are made, which would require further negotiations with Mexico and Canada. Without House Democratic votes, the trade deal cannot move. Trump has indicated he would like USMCA approved before Congress adjourns for its August recess. Ways and Means Chairman Richard Neal, D-Mass, expressed hope that negotiations with House work groups could wrap up in as little as 30 days.
The delicate negotiations come in the shadow of Trump’s threats to impose escalating tariffs on all Mexican exports to the United States if the country doesn’t do more to stem the flow of migrants from Central America. Trump pulled back from imposing the tariffs after what appears to be a provisional deal was struck with Mexican leaders. He also has pulled back tariffs on steel and aluminum.
Stalemated negotiations and a continuing trade war with China also muddy the congressional water for USMCA. Even in its current form, the USMCA isn’t a slam dunk to pass the legislatures in Mexico and Canada.
The USMCA is effectively an update of NAFTA (the North American Free Trade Agreement), including provisions relating to the digital economy that didn’t exist a quarter century ago. During his presidential campaign and early in his term, Trump threatened to talk away from NAFTA. However, strong business opposition dissuaded that drastic move, which would have disrupted supply chains of US manufacturing and imperiled US agricultural markets in Mexico and Canada.
Since the USMCA was unveiled last fall, congressional Democrats and US labor leaders signaled disappointment with enforcement procedures for labor provisions aimed at closing the pay gap between Mexican and US manufacturing workers. Wyden and Ohio Democrat Sherrod Brown have proposed tougher enforcement provisions. A bipartisan, bicameral delegation of congressional trade staffers returned from a fact-finding mission in Mexico with suggestions for beefing up enforcement. They include new ways to enforce labor provisions auditing 700,000 collective bargaining agreements in Mexico, which could take years to complete.
Provisions related to drugs and environmental issues are other areas that Democrats want to bolster in the USMCA and which Blumenauer and Bonamici will influence.
US Trade Representative Robert Lighthizer and business groups representing major US exporters are lobbying for approval now. Influential Congresswoman Debbie Dingell, D-Mich, told Bloomberg News, “I talked to Ambassador Lighthizer and everyone understands the things that need to be fixed. There are a number of us who want to get a trade bill. We need a new NAFTA. People are working toward a good bill.”