December 10, 2018

Rough Road In Congress For The USMCA?

The Trump administration has begun its outreach to Congress on the United States Mexico Canada Agreement (USMCA) and, based on reports, it looks like officials will have a lot of convincing to do before the trade pact will have a chance to gain approval from House and Senate lawmakers.

U.S. Rep. Nancy Pelosi (D-Calif.), who is expected to become speaker of the House next January, met last week with U.S. Trade Representative Robert Lighthizer and, in a statement issued after the meeting, said the USMCA would have to be changed before members of her party will support it. The Democratic leader said, “While there are positive things in this proposed trade agreement, it is just a list without real enforcement of the labor and environmental protections.”

According to Politico, frustration over the administration’s Section 232 steel and aluminum tariffs also is weighing down support for the USMCA. Reporters for the Capitol Hill newspaper noted “lawmakers on both sides have expressed displeasure that the duties remain in place despite a new NAFTA deal, with American industries and agriculture still taking hits from the two U.S. neighbors’ retaliatory tariffs on more than $15 billion worth of U.S. goods.”

President Donald Trump, meanwhile, said he will withdraw the United States from the North American Free Trade Agreement “shortly.” The New York Times said the threat is seen as an attempt to force House Democrats to quickly enact the USCMA. If the president withdrew the United States from NAFTA, Congress would have only six months to pass the USCMA. If no deal can be reached, both it and NAFTA would be void.

While discussions continue on Capitol Hill, the U.S. International Trade Commission (ITC) has started its analysis of the deal. The ITC must study the impact the agreement will have on the United States before members of Congress can vote on it. It has 105 days to issue a report to Congress, which means the ITC is likely to issue its study in mid-March 2019.