Congress could threaten agreement
New trade deal must be ratified by legislatures of all three countries
WASHINGTON — If there is one thing U.S. President Donald Trump is not confident about, it is getting his new trade agreement with Canada and Mexico through the U.S. Congress.
“Not at all confident,” he said Monday. “I’m not.”
The rarely expressed sentiment from Trump was reasonable — Congress might well not vote to ratify the agreement. The U.S.-Mexico-Canada Agreement was announced with fanfare on Monday by Trump and Prime Minister Justin Trudeau. But it is far from a done deal.
To come into effect, USMCA must be ratified by the legislatures of all three countries after it is signed by the three leaders.
Trudeau controls a parliamentary majority in Canada, and it should not be hard for incoming Mexican president Andres Manuel Lopez Obrador to get approval from a Mexican Senate controlled by his own party.
But Trump may well have less sway over Congress.
Republicans currently control both the House of Representatives and the U.S. Senate. But the leaders will not be signing until the end of November at the earliest. After that, the U.S. International Trade Commission has up to 105 days to release a report assessing the agreement’s economic impact.
It is possible that the commission will take less than 105 days, but it is likely the 2019 Congress, not this one, will be voting. And it is very possible, perhaps likely, that Democrats will then have control of at least the House.
In that case, it might be hard for Trump to win majority support for something he could tout as a victory for himself, especially given the oppositional mood of Democratic voters. And Democrats have taken years to approve trade deals even prior to the Trump era.
“Anything you submit to Congress is trouble, no matter what,” Trump said on Monday. The Democrats, he said, “might be willing to throw one of the great deals for people and the workers. They may be willing to do that for ... political purposes. Because, frankly, you know, they’ll have 2020 in mind.”
U.S. Trade Representative Robert Lighthizer has said that he was designing a deal that would get significant Democratic support. Chip Roh, deputy chief negotiator for the U.S. during the original NAFTA talks, said Lighthizer has “given labour unions and progressives a lot of the things that at least they think are very important.”
Those items, Roh said, include the inclusion of labour provisions in the main text, rather than a side agreement like in the original NAFTA, and the demise, of the investor-state provision that allows corporations to sue governments for alleged unfairness.
“It’s not necessarily going to be a more difficult Congress,” Roh said, saying Democrats “may just want to get it done.” But he cautioned that it is hard to know for sure.
Democratic Senate Leader Chuck Schumer was mildly complimentary toward the deal on Monday, saying “the president deserves praise for taking large steps to improve” NAFTA. But he also said he had not made up his mind.
One possible model for Democrats is the way they handled George W. Bush’s trade agreements with South Korea, Co- lombia and Panama, tweaking the rules to avoid holding any vote for more than four years.
Another possibility is that members of Congress could force changes to the agreement. In the original NAFTA, the U.S. negotiated side agreements on labour and environmental issues after the main text was completed, in part to try to convince Democrats to come along.
And it is not just Democrats who may have problems with the text as it stands. Pennsylvania Republican Sen. Pat Toomey listed five separate concerns in a statement Monday.