Even though the Democrats won some changes to the new NAFTA that are seen as contrary to business interests -- primarily, removing extended patent protection for pharmaceuticals in Canada and Mexico -- business groups celebrated House Speaker Nancy Pelosi's decision to hold a vote on the trade pact. A vote in the House is expected next week, but a Senate vote won't come until next year.
Unions appear ready to endorse the changes Democrats won to the NAFTA rewrite, though the most radical change -- stopping goods at the border for labor violations -- isn't in the deal. On Dec. 9, AFL-CIO President Richard Trumka said to The Washington Post, “We have pushed them hard and have done quite well,” in getting changes to the U.S.-Mexico-Canada Agreement. The House Democrats pushed for changes to the USMCA on labor, the environment, the biologics data exclusivity period and overall enforcement. If the AFL-CIO endorses their changes -- as seems likely after Trumka's comment -- passage in the House could follow quickly.
Texas voters send 36 members to the House of Representatives, and 18 attended a press conference Dec. 5 to say they want a U.S.-Mexico-Canada Agreement vote as soon as possible. But only one of the 13 Democrats in the Texas delegation attended -- Rep. Henry Cuellar, who represents Laredo and McAllen. Cuellar, the biggest booster of the new NAFTA in the Democratic caucus, said he'd been updated about the state of play between Mexicans and the U.S. trade representative at 9:30 a.m. that day, and “we're very, very, very close,” he said, but he said Mexicans tire of what they feel is a “one-more-thing”-style of negotiating from the Americans.
The U.S. needs to increase “engagement” with China to reach a trade deal, said Sen. David Perdue, R-Ga., adding that the U.S. has stronger, not weaker, trade relationships with its allies since President Donald Trump became president.
Democrats in the House insisted that their ideas about how to verify compliance with Mexico's labor laws is a balanced one that respects their sovereignty. Chief Mexican negotiator on USMCA, Jesus Seade, wrote a column published Dec. 4 that said, in Spanish, that there will be no “transnational inspectors,” even though the U.S. has pushed so much for that approach. "If the U.S. stops insisting on the pair of unacceptable ideas that the [Mexican trade group CCE] statement yesterday speaks of, we can soon have a treaty, and a very good treaty," he wrote (see 1912030033). He said that the state-to-state dispute settlement system, broken in NAFTA, "will now be 100% repaired, for all topics and sectors under the treaty."
Exactly how the U.S. Trade Representative has agreed to change the 10-year biologics exclusivity period in the U.S.-Mexico-Canada Agreement is unclear, but insiders are saying it will be less favorable to the pharmaceutical industry.
A top dairy lobbying group announced that executives would be visiting Congress Dec. 4 in what they characterized as “a last-ditch effort to save this deal,” and Farmers for Free Trade sent a letter to the top Republican and top Democrat in each chamber asking that the vote on the U.S.-Mexico-Canada Agreement come as soon as possible. The letter, signed by 2,200 farmers around the country, was sent Dec. 3, and said that trade wars have hurt agriculture badly. “We have suffered from retaliatory tariffs, lost market share, and watched while America’s competitors are seen as more reliable trading partners. The reasons for this crisis are manifold but providing certainty about continued trade with two of our three largest export markets would provide America’s farmers and food manufacturers with a needed boost,” the letter said. “We are counting on our elected officials to champion the folks back home and appreciate your urgent action.”
A Mexican business group representing manufacturers, agriculture, banking and retailers says it is very concerned that certain labor demands from U.S. politicians in the U.S.-Mexico-Canada Agreement are extreme in nature “and are totally unacceptable,” the Consejo Coordinador Empresarial wrote in a press release Dec. 2, adding bold for emphasis. These proposals could severely affect Mexico's competitiveness, the CCE said. It also said “respect for Mexico's sovereignty is non-negotiable.”
The top negotiator for Mexico on the new NAFTA told reporters in Canada on Nov. 29, “I think we are almost there.” Jesus Seade, who was in Canada meeting with his counterparts, had been in Washington the day before Thanksgiving to talk to U.S. Trade Representative Robert Lighthizer about whether Mexico could live with the edits to the new NAFTA the Democrats had asked for. Seade told reporters that the edits might be finalized “sometime in the next week,” but if not then, he said he hopes it will be before Congress leaves town for the Christmas holiday. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said in a speech on the Senate floor Dec. 2 that “if a deal cannot be reached by the end of this week, I do not see how USMCA can be ratified in 2019. As it is, the window of opportunity for 2019 is extremely tight.”
Those who advise NAFTA stakeholders say that it looks like a factory-level inspection regime will be part of what Democrats get in their edits to the U.S.-Mexico-Canada Agreement, but how disruptive that will be for businesses is completely cloudy. Kellie Meiman Hock, a managing partner at McLarty Associates, said she thinks there are ways the inspections could be done that would not make Mexico feel like American government officials are deciding whether Mexican labor laws are being followed. Hock said the two governments could select inspectors who travel together, or it could be a coalition of non-governmental organizations, as was mobilized after more than 1,000 textile workers died in a factory collapse in Bangladesh.