Like the first agreement Bill Clinton did?
Some people ain’t happy….
If approved by all three countries?
It would be Trump’s first trade deal in over three years in office….
It’s official: There is now a revised revised NAFTA.
On Tuesday, House Democrats announced that they’d back the United States Mexico Canada Agreement (USMCA), the updated version of the North American Free-Trade Agreement (NAFTA) that the Trump administration renegotiated last year.
Democrats are supporting the agreement now that they’ve secured changes to the deal, achieving concessions on labor and environmental rules and enforcement, prescription drugs, and other provisions that had long been sticking points between House Democrats and the administration.
“There is no question, of course, that this trade agreement is much better than NAFTA,” House Speaker Nancy Pelosi said at a press conference Tuesday. “But in terms of our work here, it is infinitely better than what was initially proposed by the administration.”
The tweaks Democrats negotiated — which received the critical endorsement of US labor organizations — require Mexico and Canada to sign on to the alterations. The Trump administration’s top trade representative, Robert Lighthizer, and his counterparts in Canada traveled to Mexico City on Tuesdayto meet with Mexican officials to finalize the changes and participate in a signing ceremony.
All three countries will still need to ratify this new version of the USMCA. Mexico ratified the original USMCA in June, but it must approve these changes and the deal must go through Congress and Canada’s parliament. Now that Democrats have accepted this deal, the USMCA should pass Congress, and Canada is likely to follow suit.
It’s a big victory for President Trump, who made renegotiating the deal one of his key campaign promises. But it comes at an incredibly weird time: Pelosi announced the breakthrough at a press conference about an hour after she held a separate press conference to announce that Democrats were moving forward with two articles of impeachment against the president…..
Losers:
Mexico — They had to give the most in the negotiations among the three nations. Their economy is technically in a recession now, and they wanted Trump off their backs. They struck the best deal they could, but the clear thrust of the USMCA is to make it harder for companies (especially in the auto industry) to close up factories in the United States and Canada and move entirely to Mexico, where labor costs are cheaper.
China — This is likely a negative for China. It gives Trump and Lighthizer momentum on trade. Since Trump already has one big win on trade heading into the 2020 presidential election, there’s less pressure on him to make a deal with China now.
The MAGA trade agenda — The USMCA is a win for Trump politically. But his goal of revolutionizing American’s trading relationships didn’t happen here, as my colleague David Lynch explains. GOP Sen. Charles E. Grassley (R-Iowa) famously said, “95 percent of what we’ll be voting on is the same as NAFTA.” That quote referred to the USMCA deal in 2018. It’s probably more like 85 to 90 percent now, but the bottom line is Trump didn’t burn up NAFTA. He made some modest tweaks.
Pharmaceuticals — Last year’s USMCA deal gave a certain type of drug known as “biologics” 10 years of exclusivity on the market. Democrats say this is now gone, a blow to drug companies that wanted more years to be able to charge higher prices. A fact sheet Democrats provided also says that pharma companies won’t get three additional years of patent protection when they submit paperwork about a new use of a drug.
U.S. car buyers. Economists and auto experts think the USMCA is going to cause car prices in the United States to rise and the selection to go down, especially on small cars that used to be produced in Mexico but may not be able to be brought across the border duty-free anymore. It’s unclear how much prices could rise (estimates vary), but automakers can’t rely as heavily on cheap Mexican labor now, and there will probably be higher compliance costs….