[CTC] Democrats reiterate concerns with USMCA; Brown wants talks re-opened

[Arthur Stamoulis]

Inside US Trade

Democrats reiterate concerns with USMCA; Brown wants talks re-opened 
12/12/2018

The U.S.-Mexico-Canada Agreement still has a ways to go before it can garner enough support among Democrats, several lawmakers said on Tuesday, with Sen. Sherrod Brown (D-OH) urging the parties to return to the negotiating table.

“I don’t think the negotiations are done,” Brown told Inside U.S. Trade, saying he hoped the U.S. would re-engage with Canada and Mexico. “They say they are done but I don’t think they are. Because there is not the support among the American public for this NAFTA 2.0 without real change. And NAFTA 2.0 is lipstick on a pig. I mean it looks a little better but it’s not the kind of improvement the president promised.”

Brown, who noted that the Office of the U.S. Trade Representative talks to “us” a “good bit” about the deal, said its labor standards fall “far, far short of doing anything significant on labor enforcement.”

“So fundamentally ... I think our caucus looks at the NAFTA renegotiation as what do you do to stop companies from laying off people in Ohio and announcing plants overseas the way GM did this summer?” he said.

U.S. Trade Representative Robert Lighthizer, after the agreement was signed in Buenos Aires, said the pact would “absolutely” be supported by a “very high number of Democrats <https://insidetrade.com/node/165160>.”

“Now, will we have to emphasize some things in the implementing bill? Of course,” he said. “And I’m in discussions with a variety of Democratic leaders on those points and they will be very much involved in the process moving forward and will have a strong influence on how we put things together because I want them not only to vote for it, I want them to be happy.”

But Brown said the U.S. shouldn’t even be at the “stage” of drafting implementing legislation.

“I don’t think we are at that stage,” he said. “Implementing legislation is not good enough. You’ve got to have a stronger agreement. That means going back to the table with Mexico and Canada. First of all, Mexico hasn’t passed its labor law yet. We have no business talking about implementing legislation until the agreement’s done and the agreement is contingent in part on them passing their labor law.”

An annex to USMCA's labor chapter <https://insidetrade.com/node/164564> says Mexico must adopt legislation “in accordance with Mexico's Constitution” by Jan. 1, 2019. That legislation must establish “(i) an independent entity for conciliation and union collective bargaining agreement registration and (ii) independent Labor Courts for the adjudication of labor disputes,” a key issue for the AFL-CIO.

“It is the expectation of the Parties that Mexico shall adopt legislation described above before January 1, 2019,” the annex states. “It is further understood that entry into force of the agreement may be delayed until such legislation becomes effective.”

Brown’s concerns about how the new deal would affect U.S. manufacturing jobs were echoed by Rep. Brian Higgins (D-NY), who said he was a “no” on USMCA today.

“It’s 85 to 90 percent the old NAFTA agreement, and for places like Buffalo, there may be some beneficial aspects of it relative to certain economies, but to a place like Buffalo that gets clobbered in terms of losses of manufacturing jobs, I’m still very skeptical,” he told Inside U.S. Trade.

The House Ways & Means Committee is expected to meet with Lighthizer “very soon,” Higgins said.

“As you know the administration just signed the agreement a couple of weeks ago. Now the focus becomes Congress; we will be the majority and I suspect that we will have Ambassador Lighthizer in our caucus very soon. Maybe next week. If not, very shortly after the first of the year,” he said.

As for whether a USMCA vote in March was possible, Higgins said it was “probably reasonable.”

“I think there is plenty of time,” he said.

Rep. Jim Himes (D-CT), chairman of the pro-trade New Democrat Coalition, said Lighthizer, during a Dec. 7 discussion, “struck a very optimistic chord” on labor unions and Democrats in Congress.

“[Lighthizer] characterized his discussions with all of the elements of the Democratic caucus as having been very productive,” Himes told Inside U.S. Trade. “And even said that he had had very productive and positive conversations with unions. As he called it, the Big 6 unions, he said were at worse neutral on version two of NAFTA. So, he struck a very optimistic chord about where he is with the remainder of the Democrats.”

Section 232 tariffs on Canadian and Mexican steel and aluminum and President Trump’s pledge to withdraw from NAFTA <https://insidetrade.com/node/165239> were also discussed during his call with Lighthizer, Himes said.

“I made the point that the atmosphere is already a little bit clouded by the [steel and aluminum] tariffs and the fact that most of us are seeing company after company from our districts come through and tell tales of woe about the pain the tariffs are causing. And if you layer on top a threat to withdraw from NAFTA, in totality you really are not building the kind of trust and cooperative relationship that you need if this turns out to be a closely negotiated affair,” Himes said.

He added that if Trump were to withdraw from NAFTA, as he has pledged, to force a USMCA vote, “the market and economic cataclysm will speak volumes.”

Lighthizer, Himes continued, “said he understood that and that he obviously doesn’t control every measure that gets taken by the White House.” Himes lauded Lighthizer’s outreach, saying that he “reached out is a positive sign.” After several requests for a meeting with the USTR, the New Democrat Coalition held a discussion with him earlier this year.

“New Democrat Coalition members were integral to the passage of Trade Promotion Authority and every trade agreement in recent decades,” Himes said, adding that “ongoing engagement is going to be really important if this is a closely decided thing.”

Asked if Lighthizer provided an update on how the Section 232 talks with Canada and Mexico were progressing, Himes “he just acknowledged that the kind of pain that those tariffs are imposing is a challenge within the context of confidence building with the White House. But no, he didn’t really talk much about them.”

After the USMCA signing in Buenos Aires, the USTR said the U.S. would turn its attention to the Section 232 tariffs <https://insidetrade.com/node/165158>.

Himes said the overall point of the discussion was not technical, but rather an attempt to open a “line of communication.”

“Really this call, I think on his part, was just opening up a line of communication. It was not a negotiation call,” he added. – Isabelle Hoagland(ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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