White House reaches tentative agreement with Dems on deal with Canada, Mexico
Vote could come before end of the month
WASHINGTON — Democratic negotiators and the White House have reached a tentative agreement on a new trade deal with Mexico and Canada, setting up a potential vote in Congress to ratify the deal before the end of the year.
The White House has been working to win over House Democrats to get the deal ratified in Congress since President Donald Trump signed the United StatesMexico-Canada Agreement last year. Chief among the outstanding issues raised by House Speaker Nancy Pelosi, D-Calif., was an enforcement mechanism to ensure that Mexico complies with trade rules designed to bring some Mexican manufacturing jobs back to the U.S.
“The major points they had brought up have been worked out,” Rep. Henry Cuellar, D-Laredo, a leading advocate for the trade deal, said Monday afternoon. “It’s still up to the Democrats to review, and Speaker Pelosi has to do the outreach.”
The USMCA would replace the 1990s-era North American Free Trade Agreement, which has come under increasing criticism from Democrats and Trump alike for allowing industry to move too easily overseas.
One provision of the new deal would require that 75 percent of components in vehicles sold in North America be manufactured in the U.S., Canada and Mexico, as well as 40 to 45 percent of automobile parts to be made by workers earning at least $16 an hour by 2023. Another would limit the countries’ ability to devalue their currency in a bid to increase exports. And there would be greater protections of companies’ intellectual property, as
well as measures supporting digital commerce.
U.S. Trade Representative Robert Lighthizer is scheduled to travel to Mexico on Tuesday to sign the newly negotiated trade pact with officials there, according to sources close to the talks.
Negotiations between the White House and Democrats gained momentum in recent weeks, even as Washington remains divided over Democrats’ efforts to impeach Trump for asking Ukraine to investigate Democratic president candidate and former Vice President Joe Biden.
“I think this has been a very collaborative and productive process, addressing real concerns that will have an impact on Texans and Americans across the board,” Rep. Lizzie Fletcher, a Houston Democrat, said last week.
But there are hurdles.
News that Lighthizer had struck a deal with Democrats rankled some Republicans, who worried that the administration was moving too far from the party’s longtime opposition to protectionist trade policies.
“What I’m a little concerned about is that he’s spent all of his time trying to appease Democrats and how far they’ve moved still potential on some of the key provisions,” Sen. John Cornyn, R-Texas, told reporters on Capitol Hill on Monday. “I’m going to want some assurance that he hasn’t given away the store.”
Also, AFL-CIO President Richard
Trumka has yet to sign on to the USMCA. While Democrats are working to get his support, there are enough votes between Republicans and Democrats to pass the deal regardless, Cuellar said.
“(We have the votes), but we want labor on board,” he said. “This bill really sets up a template for labor protection.”
With the 2020 presidential race looming, pressure had been building on the two sides to reach a deal quickly.
The USMCA negotiations have taken on particular urgency for Texas, which counts Mexico as its largest trading partner. Last week, a group of Texas Republicans in Congress joined Cuellar outside the Capitol to urge Congress to swiftly pass the agreement.
“No state will gain more from this agreement than Texas, and no state has more to lose if it doesn’t pass than our state, which is why we believe there should be unanimous support for this agreement from Texas lawmakers,” said Rep. Kevin Brady, a Houston-area Republican.
The closing of a North American trade deal is particularly critical for the U.S. oil and gas industry, which counts both Mexico and Canada as leading export markets. And domestic refineries rely on crude from Canada and Mexico for about half their imports, said Derrick Morgan, senior vice president for federal and regulatory affairs at the trade group American Fuel and Petrochemical Manufacturers.
“The most important thing is to make sure we have a durable trade agreement and no threat in place,” he said. “I am optimistic. The timing is a little uncertain, but we’re so close now there’s a good chance of it happening.”