House power shift muddles trade agenda
Democrats may leverage issue for other priorities
WASHINGTON – Celebrating a new trade deal with Mexico and Canada, President Donald Trump admitted at a Rose Garden ceremony in October that he was “not at all confident” the agreement could win approval in Congress.
He may have less reason for optimism following last week’s midterm elections.
Voters handed Democrats a majority of seats in the House for the first time in eight years, returning them to power in January and possibly complicating Trump’s trade agenda, especially his efforts to win approval for the new pact with Mexico and Canada.
“I see it as unlikely that (Democratic leader) Nancy Pelosi is going to say, ‘Thanks for this trade deal, President Trump, we’ll just send it along,’ ” said Bryan Riley, who follows trade issues for the National Taxpayers Union.
Congress isn’t expected to vote on the United States-Mexico-Canada Agreement until sometime next year, when Democrats will be back in charge of the House.
NAFTA fight ahead
Though trade deals are usually subject to an up-or-down vote with no amendments, Congress still would have to pass legislation to implement the agreement. House Democrats could use that legislation as the vehicle to tweak the deal or even hold it up as leverage to extract concessions from the Trump administration on unrelated issues.
At a minimum, that is likely to slow down the approval process, trade analysts said.
“Look, it was always going to be hard to get this agreement passed,” said Kevin Madden, a Republican consultant who has worked with private companies to promote free trade. “Trade agreements are tough even in the calmest of environments, when relations between the White House and Congress are in good working order. So given that it’s a pretty chaotic time and you have a change in power in Congress, it will be very challenging.”
Other parts of Trump’s trade agenda, such as his tariffs on Chinese imports, probably won’t receive as much of a pushback from the new House majority, analysts say, because many Democrats agree with the president’s protectionist policies even though they question his approach. Even Pelosi has said tariffs should be used as a leverage point to negotiate more fair and open trade for U.S. products in China.
Democrats would like, however, for lawmakers to have a say on tariffs and may pursue legislation giving Congress the right to accept or reject such levies. Similar legislation went nowhere in the current GOP-controlled Congress.
The new trade agreement with Mexico and Canada, announced at the end of September after months of negotiations, will replace the North American Free Trade Agreement, or NAFTA, a nearly quarter-century old accord that essentially eliminated tariffs on most goods traded among the three countries.
During the recent trade talks, “a lot of corporate lobbyists and congressional Republicans were downright scornful of U.S. Trade Representative Robert Lighthizer’s efforts to engage on NAFTA renegotiation with the congressional Democrats and unions that have opposed past trade deals,” said Lori Wallach, director of Public Citizens’ Global Trade Watch.
“Now,” she said, “his approach appears prescient: After this election, only trade deals that can earn Democratic support will get through Congress.”
The new trade pact includes some policies embraced by Democrats, including stronger labor and environmental provisions. Yet critics have complained those provisions don’t go far enough and are filled with too many loopholes.
What’s more, many Democrats have long opposed NAFTA and aren’t inclined to back the new deal either, said Daniel Griswold, a trade expert at The Mercatus Center, a nonprofit think tank at George Mason University.
Democratic concerns
“The administration went a long way to try to address Democratic concerns over NAFTA, but I think those concerns are so deep that the administration wasn’t able to satisfy them,” Griswold said.
The labor provisions include a requirement that, starting in 2020, at least 30 percent of cars and trucks made in North America must be built by workers earning at least $16 per hour. But critics complain those provisions are unenforceable, so House Democrats are expected to try to strengthen them through the legislation implementing the new deal.
Last week’s elections boosted the ranks of House members whose support of any trade deal will be contingent upon such improvements, Wallach said.
“If trade officials are willing to work with congressional Democrats, unions and other groups on the improvements needed to stop NAFTA’s ongoing job outsourcing and raise wages, there clearly is a policy path to a renegotiated NAFTA that could gain wide support next year,” she said.
“Of course,” Wallach said, “who knows what lunatic things unrelated to trade that Donald Trump might do in the meantime to derail that prospect.”
Many business groups, meanwhile, are eager to see the new trade deal in place and hope that the implementing legislation remains a vehicle for getting it done “rather than a vehicle that leads to fights on a whole lot of other issues in Congress,” said Rufus Yerxa, president of the National Foreign Trade Council.
“The argument we would make, from the standpoint of Democrats who care about, for example, labor and environment: This is a much better deal than the existing NAFTA,” Yerxa said. “Whether that’s the standard by which they measure it, we’ll have to see.”