[CTC] Republican governors plan White House visit to push for change of course on NAFTA

[Dolan, Mike]

Daily News
Sources: Republican governors plan White House visit to push for change of course on NAFTA
December 12, 2017


A group of Republican governors is planning a visit to the White House to make the case against a NAFTA withdrawal and to plea for a change of course in the administration's approach to the ongoing talks -- a message they also plan to reiterate in a letter to President Trump, sources told Inside U.S. Trade.



Key stakeholders aiming to save NAFTA have decided that efforts to lean on members of Congress for help have not produced sufficient results, prompting them to increasingly involve governors in a behind-the-scenes push to preserve the deal's benefits -- and to oppose radical changes they fear could backfire against U.S. industries.



Governors have raised concerns over several NAFTA proposals with a number of administration officials, including U.S. Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue, and have been lobbied extensively by Canada and Mexico. Now, sources say, a group of Republican governors is preparing to take those concerns directly to Trump -- first, they hope, in a meeting with the president, and after that in a letter now being circulated for signatures.



The industries most actively engaged in the effort to rally governors are the automotive and agriculture sectors, and private-sector sources said the governors' involvement in the discussion on autos in particular has been "really effective in getting the White House's attention," as one put it.



The source cited a recent meeting<https://insidetrade.com/node/161134> between Vice President Mike Pence and auto executives from the "big three" automakers, which was also attended by Lighthizer and National Economic Council director Gary Cohn.



Sources said Pence, a former Indiana governor, reached out to the industry executives after governors "demanded" the White House get involved, as one source described it.



Engagement between governors and the administration peaked at the Republican Governors Association annual conference meeting with Pence in mid-November. Sources said the vice president traveled to the meeting in Austin, TX, to brief the state executives on the tax reform bill that was being voted on in the House a day later.

But instead of tax reform, sources said, many governors wanted to talk only about NAFTA and the concerns with the administration's proposals they had heard from constituents and stakeholders. The overall message from the governors to Pence -- to take to the president -- was "you've got to change course on this," one private-sector source said.



A source involved in the governors' meeting said Pence was "taking notes and encouraged them to come and engage with the administration about these concerns and talk about ways to move forward."



The general goal behind the meeting was to make Pence aware of the risk involved in the administration's NAFTA approach, another source said, and to hear that governors "want to make sure Lighthizer understands that."



Sources briefed on the Austin meeting also said several governors there suggested to Pence that Lighthizer was not serving the president well, and that his approach to the NAFTA talks was misguided.



Some governors have shared their concerns directly with Lighthizer. Several sources described an October meeting between Lighthizer, Pence and Iowa Gov. Kim Reynolds at the White House, which one described as "contentious" and others said left Reynolds no less concerned about NAFTA than before the meeting began.

One source who was briefed on the meeting said Reynolds touted the importance of the agreement for her state, particularly for agriculture, but Lighthizer was dismissive of her comments. At one point, that source said, Pence intervened, telling the USTR he was "not listening" to Reynolds.



But another source with knowledge of the conversation disputed those accounts, saying the meeting generally went well and that everything Lighthizer said that day was in line with what he has said about NAFTA in public -- including stressing the administration's willingness to walk away from the table if in his view Canada and Mexico do not engage more seriously in the negotiations.



The source described Lighthizer as "passionate" and Pence as "more calm," characterizing Pence's intervention in Lighthizer and Reynolds' conversation as "benign." The vice president, according to the source, only meant to help clarify one of Reynolds's questions -- while Pence's "you're not listening" comment was meant more like "you're not understanding the question."



The source said that he would not describe Reynolds as "alarmed" when she left the meeting, but added that "Lighthizer brings out strong feelings in people."



Reynolds, in a statement to Inside U.S. Trade, said she was "very appreciative of the access this administration has given not only to me, but to my fellow governors as well, as I was able to reiterate in person how important it is to the Iowa economy to finalize the modernization of NAFTA. It is clear that this administration is committed to negotiating the best deal for America, and I look forward to partnering with them in that endeavor."



Sources said Michigan Gov. Rick Snyder is among those who have talked to Lighthizer about the negotiations, particularly the auto rules-of-origin proposal that the auto industry -- so important to his state -- is pushing back against.



Several studies<https://insidetrade.com/node/161069> have shown Michigan would be one of the most hard-hit states if the U.S. withdraws from NAFTA.



A spokeswoman for Snyder told Inside U.S. Trade his office does not comment on discussions the governor has in private meetings. The spokeswoman said "Gov. Snyder is engaged in an ongoing dialogue with the Trump Administration and other governors on trade matters, including NAFTA, and he expects that productive work to continue."



Reynolds and Arkansas Gov. Asa Hutchinson are leading the effort to send Trump a letter on NAFTA that is being circulated for signatures, sources said. The source with knowledge of Reynolds and Lighthizer's conversation said there was no timetable for the letter but that it would likely be sent only after the governors have had a chance to meet with Trump, or perhaps with Pence.



A draft of the letter reviewed by Inside U.S. Trade says governors "have a unique perspective on trade" and that NAFTA has resulted in "big gains" for the U.S. Withdrawing from it, they write, would be a "self-inflicted wound."



The letter also says the governors "commend" Trump's Cabinet "to first do no harm" and keep the trilateral structure of the agreement intact.



A USTR spokeswoman declined to comment on accounts of Lighthizer's discussions with governors.



A source said the governors "want to be constructive players in this process" but at the same time "have to pick a fight for their own credit."



"They all sort of know that the minute you try to push Trump into a corner he lashes out and doubles down," the source said.



The source said countering Trump on NAFTA could have immediate consequences for the ongoing talks as well as political consequences for those governors most dependent on Trump's support for reelection.



Stakeholders and some congressional sources have privately lamented a lack of public engagement by Texas Gov. Greg Abbott, whose state is hugely dependent on trade with Mexico.



Indiana's governor, Eric Holcomb, has not had any conversations with Lighthizer but "has been working with Indiana manufacturers for months on this issue," his office said. And, in October, Holcomb sent a letter to the USTR saying contentious U.S. proposals like the one on auto rules of origin "pose a significant risk to delay or derail the expedited renegotiation timeline."



"Disrupting supply chains with new burdensome rules of origin such as national content requirements or unprecedented regional content levels, as the U.S. will reportedly table in Round 4, will increase cost, reduce demand, impede exports, and negatively impact U.S. employment in Indiana and other manufacturing states," Holcomb wrote on Oct. 10.



"Free and fair trade policies with Canada and Mexico are essential if Indiana is to continue along this record-setting economic pace, and I am confident that this can be achieved while the pieces of NAFTA so critical to states like ours are preserved," Holcomb added. -- Jenny Leonard (jleonard at iwpnews.com<mailto:jleonard at iwpnews.com>)




Michael F. Dolan, J.D.
Legislative Representative
International Brotherhood of Teamsters
Desk  202.624.6891
Fax    202.624.8973
Cell    202.437.2254

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