[CTC] Grassley: NAFTA ratification will be his top priority as Senate Finance chair

Tue Dec 18 06:40:22 PST 2018

Inside US Trade

Grassley: USMCA ratification will be his top priority as Senate Finance chair 
12/14/2018

Incoming Senate Finance Committee Chairman Chuck Grassley's top trade priority in the next Congress will be the ratification of the U.S.-Mexico-Canada Agreement, the Iowa Republican told Inside U.S. Trade this week.

The USMCA was signed last month on the sidelines of the G20 Summit, but the deal has a long way to go before it's enacted, with one Senate Finance Democrat, Sherrod Brown of Ohio, even calling for the three countries to go back to the negotiating table. Brown told Inside U.S. Trade <https://insidetrade.com/node/165256>on Wednesday that he did not think negotiations were over and added that the U.S. shouldn't be drafting implementing legislation.

“They say they are done but I don’t think they are,” Brown said. “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.”

Congressional Democrats, labor organizations and environmental groups have expressed concern that the labor and environmental provisions in USMCA are not enforceable. In an interview on Wednesday <https://insidetrade.com/node/165275>, Grassley said he's “been hearing ... that there's got to be more for labor and the environment” but added that he doesn't “know how you go back to the table now.”

“We better be getting those agreements as fast as we can, for the certainty of it,” Grassley said of USMCA as well as potential agreements with Japan, China and Europe.

Jesús Seade, who participated in the latter stages of the USMCA negotiations on behalf of Mexican President Andres Manuel Lopez Obrador, said at an Atlantic Council event <https://www.atlanticcouncil.org/events/webcasts/2018-atlantic-council-annual-forum> on Friday that re-opening negotiations was not the way to address Democratic concerns. Instead, he called for a “creative solution.”

Acknowledging that Democrats will take over the House next year, Seade noted that the North American Free Trade Agreement was negotiated by the Bush administration but ratified during the Clinton administration -- a shift in power he likened to a “tsunami.” Democrats came in with “enormous labor and environmental demands” when Clinton took the presidency in 1992, yet “not a single comma was changed in the agreement itself, despite the strength of the Clinton onslaught,” Seade said.

The labor provisions in USMCA are “extremely strong,” Seade added. “It's almost a blueprint of best practice on labor issues if you were to give it to the International Labor Organization and ask them to draft it for you.” On the environment chapter, Seade said even though it doesn't mention climate change, the protection of the ozone layer is “given great prominence”

But Seade also recognized that “What it is missing, in the view point of Democratic congressmen, is enforcement, and enforcement is a trade issue not a labor issue.” To address those concerns, Seade suggested strengthening dispute settlement mechanisms by appointing judges or expert panels for labor or environmental violations.

Asked how he imagined working with Democrats on trade agreements, Grassley said he thinks “the country is so ideologically divided -- and that’s reflected in the Congress -- so it will be a little more difficult to reach bipartisan agreement” than when he was a member of the committee under the chairmanship of former Sen. Max Baucus (D-MT).

Grassley served as either a ranking member or chairman of the Senate Finance Committee from 2001 through 2010. Under Baucus' leadership, Grassley said the two sides “worked hand in glove,” except on two issues: Obamacare and the 2003 tax bill.

“I think everything else that came out of the committee was bipartisan and I think it’s going to be a little more difficult [this time], but I can tell you this: I’ve had a lot of cooperative relationships with Democrat ranking member Wyden on several issues. Not necessarily just finance committee issues but he and I can work together,” Grassley said, pointing to a bipartisan bill he recently moved along with the top Democrat on the panel, Sen. Ron Wyden (D-OR), on prescription drug medication.

“Now that doesn’t mean we’re going to work together as well as Baucus and I worked together, because it’s a little bit different political environment in the country,” Grassley added.

One contributor to the current political environment is President Trump, who has pledged to withdraw from NAFTA as a means of putting pressure on lawmakers to back USMCA.

Grassley said he previously called an early NAFTA withdrawal <https://www.bloomberg.com/news/articles/2018-02-16/ending-nafta-could-cause-rural-depression-gop-senator-says> “catastrophic” because “I didn’t know we’d ever get an agreement, and if you pulled out it would be chaotic, you know going back to 1993.”

But “it's a little different now,” Grassley said. The withdrawal now serves “as a strategy to get an agreement passed through Congress as opposed to the fact that we might not have anything. So forcing Congress to act, I think if Democrats are going to play politics with it, I think it’s a necessary strategy,” he said.

Seade also said he saw the withdrawal pledge as a strategy but added that “dumping NAFTA” without USMCA in place would be “unlikely” because politicians would take into consideration the public reaction to the agreement. “I wouldn't see a lot of political capital in dumping NAFTA,” Seade said.

Grassley also said he would prioritize limiting the executive branch's authority over Section 232, though not necessarily through the legislation introduced by Sens. Rob Portman (R-OH), Doug Jones (D-AL) and Joni Ernst (R-IA) in August, coined the Trade Security Act.

The bill would “reform Section 232 of the Trade Expansion Act of 1962 to better align the statute with its original intent as a powerful trade remedy tool for the president and Congress to respond to genuine threats to national security,” its backers said in a press release <https://www.portman.senate.gov/public/index.cfm/2018/8/portman-jones-ernst-introduce-trade-security-act-to-reform-national-security-tariff-process-increase-congressional-oversight>.

“Now I’m not endorsing that specific legislation, but I am signaling to a lot of people through you or just to colleagues that I want to...in a very generic sense ... to put Congress in the driver’s seat- particularly in the determination of national security,” Grassley said.

 “I think that with 232 provisions that Congress delegated too much of our constitutional authority to the president,” Grassley added. “Now you have to delegate some because Congress can’t negotiate with foreign countries, you got to have one person doing it and that’s the president. 535 members of Congress can’t hardly negotiate, so you got to delegate some. But I think they delegated too much authority.”

On Section 301, used to levy tariffs on $250 billion in Chinese goods, Grassley said he hasn't “drawn any conclusions.” -- Maria Curi(mcuri at iwpnews.com <mailto:mcuri at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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