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Tuesday, December 10, 2019

House Democrats announce agreement with Trump administration on revised trade pact with Canada, Mexico

The same day Democrats announced impeachment charges against President Trump, House Speaker Nancy Pelosi also announced agreement with his administration on a modified North American trade pact meant to replace NAFTA.

"The California Democrat said the revamped U.S.-Mexico-Canada Agreement is a significant improvement over the original North American Free Trade Agreement, crediting Democratic negotiators for winning stronger provisions on enforcing the agreement," Andrew Taylor reports for The Associated Press.

The agreement is a win-win, politically: Trump scores a major political victory while moderate Democrats get a legislative accomplishment they can tout with voters back home, Politico reports.

"NAFTA eliminated most tariffs and other trade barriers involving the United States, Mexico and Canada," Taylor reports. "Critics, including Trump, labor unions and many Democratic lawmakers, branded the pact a job killer for the United States because it encouraged factories to move south of the border, capitalize on low-wage Mexican workers and ship products back to the U.S. duty-free."

Pelosi was able to bring labor unions to the table, and spearheaded negotiations with the administration to win stronger enforcement provisions likely to be popular with Democrats, especially those from manufacturing areas that have been hurt by job losses. "The original NAFTA badly divided Democrats but the new pact is more protectionist and labor-friendly, and Pelosi is confident it won't divide the party, though some liberal activists took to social media to carp at the agreement," Taylor reports. "Democrats see the pact as significantly better than NAFTA and an endorsement by AFL-CIO President Richard Trumka could be the key to winning significant Democratic support."

For example, the pact requires that 40% to 45% of cars eventually be made in countries that pay autoworkers at least $16 an hour; that will likely bring auto manufacturing jobs back to the U.S. and Canada, Taylor reports. Top trade officials from the U.S., Canada and Mexico are meeting in Mexico City today for an afternoon ceremony finalizing the deal, Politico reports.

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