National Post (National Edition)
Post-election headache No. 1
Will the impeachment inquiry that has Democrats in the U.S. House of Representatives figuratively on fire suffocate the USMCA before it emerges from Congress? That seems quite possible. Here’s why.
Both Canada and the U.S. have to ratify the updated NAFTA in a way that codifies the agreement in the respective countries’ laws. The U.S. Congress and our Parliament have to pass “implementation acts” that transform the free trade agreement’s rules into domestic legislation that is then voted on. Even before impeachment began the Democrats were struggling with the USMCA and signalling they would not ratify the agreement without changes.
Democrats have serious concerns about whether Mexico can or will enforce labour reforms mandated by the USMCA to bring its laws up to standards satisfactory to the U.S. Mexico did pass labour reforms earlier this year, including on wage rates, that technically bring the country into compliance with the USMCA. Yet Mexico’s 2020 budget makes significant cuts to the ministry of labour, which causes Democrats to worry that corporations will continue to outsource jobs to Mexico, where wage rates remain substantially lower than in the U.S. The question Democrats ask is: How committed is Mexico to enforcing its own labour reforms? They want a guarantee and House Speaker Nancy Pelosi says this can only come from changes to the USMCA itself. That will not be easy.
The only way to include stronger enforcement provisions in the USMCA is to open it up to renegotiation. But Canada and Mexico have said they won’t renegotiate the deal. There is a possible technical fix: a side letter between Mexico and the U.S. addressing this issue, but whether it would be enforceable or merely a kind of non-binding declaration of principles would depend on what exactly is negotiated.
In any eve n t , the Democrats are not thrilled with this approach. It’s a poor second choice for them. Add to this the problems that Democrats have with a 10-year intellectual property monopoly on pricing for new biologic drugs — they want a shorter period to enable what they claim will be greater government flexibility to negotiate lower prices for drugs — and ratification faces major roadblocks even before we talk about the impeachment inquiry.
Peter Navarro, the president’s director of trade and manufacturing policy, says any USMCA implementation act must be voted on and passed by Congress by the end of this month. The likelihood of this happening in the next 10 days seems remote. Although a Democratic working group has been negotiating with Robert Lighthizer, the U.S.’s USMCA negotiator, and although Speaker Pelosi has repeatedly said they are on a path to “Yes,” the Democrats are unwilling to allow the USMCA to move forward until their concerns have been addressed. Nor are they in a rush. They have no hard deadline by which they want to see their issues resolved.
Throw all this, including the end-of-the-month deadline, into the “poison well” of the formal impeachment proceedings Pelosi authorized on Oct. 2 and the prospects for success seem slim. The ratification demands the Democrats have lain before the president require goodwill, compromise and a non-partisan willingness to come to agreement. Yet this bargaining will be unfolding in what is already a bitterly divided, toxically partisan Congress, a large part of which is bent on removing the president from office. In this atmosphere, ratification becomes a difficult proposition, to say the least.
Although Pelosi insists the president can still work with Congress to make the hard choices necessary to get ratification even as Congress conducts its impeachment inquiry, Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy are having none of that. They have accused Pelosi of using the USMCA as a “political football,” strategically delaying progress so as to deny the president a high-profile victory for political reasons.
It’s hard not to see some truth in this, especially going into an election year.
Who knows how long the impeachment inquiry will take? House Democrats say they hope investigations proceed “expeditiously” but haven’t settled on an enddate. To get to a USMCA ratification vote requires both conciliation and recognition that the president will indeed get a political “win” if the House approves the USMCA. Will the Democrats compromise on their demands, permit a ratification vote this fall and give the president his USMCA even as they and the House move steadily toward impeaching him? Though it’s not impossible, I’m not betting on it. And if a ratification vote is not held by the end of October, as Navarro has suggested must happen, or even by American Thanksgiving, all the while as the impeachment inquiry continues, all bets are off on whether the USMCA sees the light of day until next year’s election is over.