USMCA May Fall Victim to Partisan Conflict

President Donald Trump (L) speaks at the White House on Nov. 25, 2019. (Jim Watson/AFP via Getty Images); House Speaker Nancy Pelosi (D-Calif.) speaks to the media during her weekly press conference at the U.S. Capitol in Washington on Nov. 21, 2019. (Alex Edelman/Getty Images)

WASHINGTON—With just a few legislative days left until the end of the year and a busy impeachment and fiscal agenda, the ratification of the new free trade deal with Canada and Mexico may slip into 2020.

The dispute over the provisions of the new United States–Mexico–Canada Agreement (USMCA) escalated after House Speaker Nancy Pelosi (D-Calif.) on Nov. 21 raised doubts about the possibility of approving the accord before the end of this year.

“It’s just pure politics that have delayed this important trade deal,” Stephen Moore, a conservative economist and former Trump campaign adviser, told The Epoch Times.

“It’s been well over a year since the USMCA was agreed to by Mexico, Canada, and the United States. It should have been very speedily ratified by Congress,” he said, adding that further delays could have a “detrimental” effect on the economy.

The three countries agreed on the USMCA in October last year after a lengthy and intense negotiation process, and the countries’ leaders signed it Nov. 30. Once it’s approved by Congress, the USMCA will replace the 25-year-old North American Free Trade Agreement (NAFTA).

President Donald Trump expressed frustration with Pelosi over the delays in holding the vote.

“It is sitting on Nancy Pelosi’s desk. She’s incapable of moving it, it looks like. Everybody knows it is a great deal,” Trump told reporters on Nov. 25.

A day before, he wrote on Twitter that USMCA was “dead in the water.” He accused Democrats of not bringing a number of important pieces of legislation, including the trade pact, to the House floor.

Moore said many Democrats “don’t want to give Trump a victory on anything.”

If the approval of the pact drifts into the 2020 election cycle, it would be “harder and harder to pass anything,” he said.

“It’s a dangerous and delaying tactic,” Moore noted. “This was very delicately agreed to by all three countries. And if we start opening up for renegotiation and if Canada and Mexico do the same, I’m worried that this will actually disrupt a very ably negotiated treaty.”

Labor Unions

The Trump administration and House Democrats have been negotiating for months to resolve their differences on the USMCA, mainly on the provisions of labor, environment, drug pricing, and enforcement. Nine Democrats have formed a working group, and they’ve been exchanging texts with U.S. Trade Representative Robert Lighthizer. They have brought the demands of labor unions to the bargaining table as well.

Trump accused Pelosi of being too much influenced by Richard Trumka, president of AFL-CIO, the largest federation of unions in the United States.

“Richard Trumka has her mortified. She won’t do the USMCA and everybody in the country wants it—the farmers, the manufacturers. But Richard Trumka plays her like a fiddle,” he told Fox News on Nov. 22.

Trumka responded to Trump in a series of tweets on Nov. 22, saying that his comment about playing Speaker Pelosi “like a fiddle is laughable.”

“As I’ve said for months, if the new NAFTA benefits workers, we'd support it. It’s simply not there yet,” he wrote.

The labor leader has traveled around the country to lobby against the USMCA, arguing that the new deal’s enforcement provisions need dramatic revisions to better protect American workers.

Enforcement

Pelosi on Nov. 21 echoed Trumka’s comments and said they could reach an agreement with the Trump administration if the new agreement was made enforceable.

According to Jennifer Hillman, a senior fellow for trade and international political economy at the Council on Foreign Relations, Democrats are right to insist on improving the enforcement provisions in the new trade deal.

“NAFTA included a dispute settlement mechanism—Chapter 20—under which most NAFTA provisions were supposed to be enforced, but the mechanism was inherently flawed and proved to be utterly unworkable,” she wrote in a blog on Oct. 7. “Unfortunately, Chapter 20’s successor, the USMCA’s Chapter 31, does not fix those fatal flaws.”

She said that due to these flaws in the dispute settlement system—for example, delaying indefinitely the formation of a panel to decide a dispute—any party could easily block the enforcement of many of the vital provisions of the USMCA as they did under NAFTA.

It is possible that the revised enforcement provisions address these flaws, but those provisions have not yet been revealed. House Ways and Means Committee Chairman Richard Neal (D-Mass.), who leads the working group, told The Epoch Times that progress was made during the meeting with Lighthizer last week.

“We have a responsibility to drastically improve the situation,” Pelosi said at a press conference on Nov. 21. “That is to say, make it real, not just NAFTA with sugar on top, but a change in the fundamentals of it.”

A few months ago, Mexico passed a sweeping labor reform law. Pelosi, however, noted that the United States should be able to evaluate Mexico’s “ability to honor their commitments.”

The USMCA has strong labor rules, which makes the deal an important milestone for international trade, according to trade experts. The new agreement also incentivizes the use of high-wage labor to boost production in the United States and Canada. And the deal establishes modern digital trade rules that have significant implications for the U.S. technology sector.

Mexico’s Reaction

Mexico and Canada are America’s two largest export markets. North American trade supports more than 11 million U.S. jobs, according to the Wilson Center.

Mexico became the first country to ratify the new trade deal. Canada previously said that it was ready to vote for the deal but would act in unison with U.S. Congress.

Mexico on Nov. 25 urged Pelosi to approve the deal. Speaking at a press conference, President Andrés Manuel López Obrador said he would send a letter to the speaker this week. He said he believed that Pelosi and Democratic lawmakers would help Mexico and that the U.S. Congress would ratify the accord before the year-end.

Following Mexico’s reaction, Pelosi put out a statement on Nov. 25, implying that the ball was now in Trade Representative Lighthizer’s court.

“We are within range of a substantially improved agreement for America’s workers. Now, we need to see our progress in writing from the Trade Representative for final review,” she stated.