House Democrats and the Trump administration are “on a path to yes” to a bill for ratifying the U.S.-Mexico-Canada Agreement on free trade, House Speaker Nancy Pelosi, D-Calif., told reporters Oct. 2. House Ways and Means Committee Chairman Richard Neal, D-Mass., leads a USMCA working group that recently sent the Office of the U.S. Trade Representative a “counteroffer to what the administration has proposed,” Pelosi said. “When we can arrive at a place where not only do we have our issues addressed, but that we have enforceability that will make it real for America’s families and farmers, then we can go down that path.” President Donald Trump says he wants USMCA “to go forward, and we are awaiting the language on enforceability” from USTR, Pelosi said. She’s “hopeful” that House Democrats and USTR will reach agreement on USMCA enforceability, “and I’m hopeful that it will be soon,” she said. “We have a good working relationship” with USTR, she said. “Believe me, the quiet you hear is progress.”
USMCA
The U.S.-Mexico-Canada agreement is a free trade agreement between the three countries, also known as CUSMA in Canada and T-MEC in Mexico. Replacing the North American Free Trade Agreement (NAFTA) in 2020, the agreement contains a unique sunset provision where, after six years (in 2026), any of the three parties may decide not to continue the agreement in its current form and begin a period of up to 10 years where USMCA provisions may be renegotiated.
Even as the U.S. Chamber of Commerce gives a nudge to House members by advertising for the U.S.-Mexico-Canada Agreement in 12 districts, a top official is expressing confidence that the negotiations are on track. Neil Bradley, the chief policy officer, told reporters Oct. 1, "Our conversations with Democrats and Republicans lead us to believe we are close." He added, "We’ve kind of set a deadline we believe that USMCA should be passed before Thanksgiving. We picked that based off where we thought the progress was in the negotiations."
House Ways and Means Committee Chairman Richard Neal, D-Mass., who leads the working group tasked with getting fixes to the NAFTA rewrite, said that Democrats and the U.S. trade representative have "reached agreement on a couple of substantial issues." Neal, who earlier told International Trade Today that he hopes to have a vote on the deal before Thanksgiving, said the progress at the staff level during the two-week recess that starts Sept. 30 will be critical. He said he hopes that when the working group returns, "we'll have a chance to see the goal line."
When Democrats met in the House of Representatives the morning after House Speaker Nancy Pelosi formally initiated an impeachment inquiry, the bulk of the meeting was an optimistic briefing on the progress toward refining the U.S.-Mexico-Canada Agreement to satisfy Democratic priorities.
International Trade Today is providing readers with some of the top stories for Sept. 16-20 in case they were missed.
House Ways and Means Committee Chairman Richard Neal, D-Mass., said that the two sides made progress again on edits to the U.S.-Mexico-Canada Agreement when they met Sept. 20. "Once issues are resolved, they're going to come off the table, and we're not going to revisit them as we proceed to the next one," Neal said. He said the Democrat working group he leads will have a written response for U.S. Trade Representative Robert Lighthizer next week, when they meet again.
Rep. Katie Hill, D-Calif., is recruiting signers to a letter that asks the U.S. trade representative to include binding climate standards in NAFTA 2.0, also known as the U.S.-Mexico-Canada Agreement. However, as the trade and environmental advisory committee noted when it evaluated the NAFTA rewrite, "Congress has mandated that trade accords should not include provisions that regulate greenhouse gas emissions." Because of that statute, passed in 2015 in the customs reauthorization, the advisory committee said it wished that the new NAFTA had incentivized trade and investment in renewable energy and building infrastructure that addresses climate change.
House Democrat working group members -- those responsible for convincing the administration to edit the new NAFTA to suit Democrats -- are encouraged and said that there is a deal to be had, if the administration continues to compromise, multiple members said in Sept. 18 interviews. Trade Subcommittee Chairman Earl Blumenauer, D-Ore., told International Trade Today Sept. 18: "We were pleased to get an answer ... it's not there [yet], but it's encouraging. We're going to meet tomorrow, and next week, and we'll just keep plugging away, narrowing the gaps, and if people want a deal, we can make one."
Former Rep. Phil English, R-Pa., now co-chairman of Arent Fox's lobbying team, says the incentives are in the wrong place for House Democrats to ratify the U.S.-Mexico-Canada Agreement. English was featured on an Arent Fox Sept. 16 webinar on "working through the chaos" along with Grant Aldonas, a former top trade lawyer on the Senate Finance Committee, former Sen. Byron Dorgan and two trade lawyers. English said if the economy worsens, it hurts Trump, not House Democrats, and that the NAFTA rewrite faces "a great deal of opposition" from elements of the Democratic coalition. He said it may never get ratified if it doesn't get done in the next two months.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, says he has not been able to see the written counterproposal on the NAFTA rewrite from the USTR to the House Democrat working group, but said that ending the ability to block panels in state-to-state dispute is under discussion. Grassley said his staff has had an overview of the administration's proposals to refine the new NAFTA, known as the U.S.-Mexico-Canada Agreement, "and we look at it as something we can live with." He said he doesn't know how Democrats have received the counterproposal. "I think that’s more important than my reaction to it," he said.