[CTC] Speculation on NAFTA vote timing

[Arthur Stamoulis]

Two articles below... 


U.S., Mexican, Canadian analysts eye USMCA vote, debate timing
October 03, 2018 at 6:37 PM
 
Economic counselors from the Canadian and Mexican embassies in the U.S., along with former USTR officials, this week debated what comes next for the new U.S.-Mexico-Canada Agreement as the three countries proceed toward ratification and implementation.
 
Key trade advisers for Canada and Mexico were sanguine about USMCA’s path forward in their countries, but the former U.S. officials suggested a tougher road ahead in a fraught political environment.
 
Eric Farnsworth, vice president of the Council of the Americas, said “I don’t think we can assume that this is a done deal in any stretch.” Farnsworth is a former USTR official who also served as a senior adviser to the White House special envoy for the Americas during the Clinton administration.
 
During an Oct. 3 event <https://www.youtube.com/watch?v=wK85_jEToP4&feature=youtu.be> in Washington, DC, Farnsworth said that at the “political level” the process was just beginning -- and suggested that President Trump could renew plans to kill NAFTA if an implementing bill was not approved by Congress.
 
The three NAFTA countries announced the completion of the new trilateral pact <https://insidetrade.com/node/164559> late Sunday evening.
 
“It doesn’t matter what’s in the text, it doesn’t matter how magnificent the provisions are,” Farnsworth contended. “It matters if Congress wants to give the executive a victory. Maybe they do; I’m not saying they don’t. But if we get to that point, it’s going to take a huge amount of work just like the original NAFTA did.”
 
Farnsworth said the deal had to be viewed in “raw political terms” because “ultimately what you are asking people to do is take a highly charged political vote during a highly charged political moment,” he noted.
The key number to remember, he continued, is “218.”
 
“You need 218 votes in the U.S. House of Representatives,” he said. “It doesn’t matter where they come from but you’ve got to get to 218 and if the Democrats have majority control of the House ... I am not saying that number is easier or harder but its more complicated with an opposition Congress to a Republican White House.”
 
Democrats this week have urged the administration to accelerate engagement <https://insidetrade.com/node/164568> with lawmakers over the next 60 days -- before a potential deal is signed -- to secure their support. Rep. Sander Levin (D-MI) this week told reporters that his caucus was “going to retake the House.”
 
President Trump, meanwhile, said on Monday that “anything you submit to Congress is trouble.” But U.S. Trade Representative Robert Lighthizer said he doubted that the deal would face substantial resistance <https://insidetrade.com/node/164571> on Capitol Hill, contending that “both sides should be very pleased.”
 
Farnsworth outlined two scenarios -- not “likelihoods” -- for what might transpire.
 
“One scenario ... is that the current NAFTA is going to remain in force for a good long time because it is going to take a while for the U.S. political system to get to the point where they are going to take a vote on this agreement because they are not going to bring it up unless they have 218 votes in the bag,” he said.
 
Such a result, he continued, “could take a good long time particularly ... if a Democratic Congress is exercising its oversight authority to investigate the White House on all kinds of things unrelated to trade. So, the cooperation on both sides of Pennsylvania Avenue is going to be even that much more complicated.”
 
The second scenario, Farnsworth posited, would be if Congress refused to pass the USMCA for political reasons, triggering Trump to say “I did what I said I was going to do, we replaced NAFTA. Congress is not going to give me a win, but we are not going to do NAFTA because that was the worst trade agreement ever negotiated.”
 
And if Congress doesn’t pass USMCA, Trump’s likely alternative would be to threaten to “rip up the existing NAFTA,” which would bring all three countries “right back to where we started a year ago.”
 
“You have the potential for the U.S. to say ‘enough,’” he said, adding Trump would likely say “Boom we are out of here.”
 
Farnsworth highlighted what he referred to as a fundamental difference between “those who want the current agreement to continue and those that are being asked to take an affirmative vote in favor of its replacement.”
 
“If you are a congressperson and you are being asked to vote for this or not vote for it, the easiest answer there is delay. Push this off, let the public opinion coalesce around it,” he contended.
 
Earlier this week, several Republican lawmakers said there would be a push to approve the USMCA this year if the GOP lost its majority in Congress, Bloomberg reported on Oct. 2.
 
“If the Democrats take the House, the vote will be in the lame duck” session in December, Sen. Chuck Grassley (R-IA) said.
 
But Vanessa Sciarra, vice president for legal and trade affairs with the National Foreign Trade Council, said the U.S. “has a pretty daunting set of tasks ahead” -- as outlined under the 2015 Trade Promotion Authority law -- before a vote. Sciarra is a former USTR assistant general counsel.
 
Those tasks, she continued, include the preparation of implementing legislation, a statement of administrative action, an International Trade Commission study and “environment and labor reports.”
 
“And all of that has to be given to the House Ways & Means and Senate Finance committees before the vote,” she said, questioning if all of those boxes could be checked by December.
 
“And that’s not even to talk about the political side of it,” Sciarra added. “That is just the physical paperwork that has to go from USTR ... to the Congress in order for this document, this agreement to have the proper paperwork and the backing that it needs to go forward under our statute.”
 
The legislative procedures for Mexico and Canada, meanwhile, are viewed as less complicated.
 
In Mexico, the trade agreement will be voted on by the Senate, which this week enlisted key committees to examine it, according to Karen Antebi, an economic counselor in the Mexican embassy's Trade and NAFTA Office.
 
Antebi said she did not “foresee any kind of real trouble” relating to the passage of the agreement because of sustained engagement between the incoming and outgoing administrations. President-elect Andrés Manuel López Obrador last week said he would not reopen the deal <https://insidetrade.com/node/164548> with the U.S. once he takes office Dec. 1.
 
Despite polls showing increasing support <https://insidetrade.com/node/164561> for the new pact, Antebi acknowledged that “it is a political vehicle and, at the end of the day, there are other elements that are coming into play.”
 
Colin Bird, the minister-counsellor for trade and economic policy at the Canadian embassy in Washington, DC, outlined Canada’s domestic procedures for the new pact.
 
“Our requirement on treaties is that they have to sit before our parliament for 21 days, but [the deal’s passage] is an executive decision,” he said during the same Oct. 3 event. “Implementing legislation has to go through our parliament, but in the Canadian system of a government with a majority they have the ability ... to move legislation fairly expeditiously.” -- Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)
 


https://www.bloomberg.com/news/articles/2018-10-02/gop-to-seek-trade-bill-vote-this-year-if-democrats-win-house <https://www.bloomberg.com/news/articles/2018-10-02/gop-to-seek-trade-bill-vote-this-year-if-democrats-win-house>

GOP to Seek Vote on New Nafta This Year if Democrats Win House

By: Erik Wasson and Jenny Leonard
10/02/2018

Senior Republicans in U.S. Congress are pushing to approve a revised trade deal with Canada and Mexico this year if the party loses its majority in the House of Representatives.

Trade experts have been expecting a congressional vote on the Nafta successor to be delayed until next year, once the next Congress has started. Midterm elections will take place Nov. 6, and polls suggest Democrats are favored to take control of the House -- a scenario that will make it harder for President Donald Trump to win support for the accord, which he has rebranded the U.S.-Mexico-Canada Agreement.

“If the Democrats take the House, the vote will be in the lame duck" session in December, Republican Senator Chuck Grassley of Iowa said Tuesday in an interview. Grassley, chairman of the Senate Judiciary Committee, is seen as a front-runner to chair the Senate Finance Committee when Orrin Hatch retires next year. The Finance committee is the main Senate panel responsible for trade.

Hatch said the Senate "ought to move on Nafta as soon as we can."

Not all Republicans are sure that a vote will happen this year, given that trade is such a volatile issue in the U.S. and that Nafta has faced widespread criticism.

“I know people are still going through the details, but it’s not a foregone conclusion that it will get confirmation by the Senate,” Senate Majority Whip John Cornyn of Texas, whose job is to round up votes for the deal, told reporters.

Congress will be busy in the December lame-duck period trying to avoid a government shutdown. Trump has said he may refuse to sign any more spending bills unless he gets funds for his southern border wall. The current stopgap funding bill runs out Dec. 7. 

Under so-called trade promotion authority, a trade deal can pass the Senate with 50 Republican votes. But in exchange, the administration must clear a series of procedural hoops, including the completion of a report on the economic impact, a step that typically takes more than three months. Congress is allowed to vote without the International Trade Commission report being completed, but Democrats have warned that doing so would risk blindly approving a deal that costs jobs.

U.S. and Canadian negotiators worked <https://www.bloomberg.com/news/articles/2018-10-01/u-s-canada-agree-to-nafta-replacement-that-will-include-mexico> around the clock this weekend to secure an agreement just before a Sunday midnight deadline, allowing leaders from those nations and Mexico to sign the accord by late November. The 24-year-old Nafta will now be superseded by the U.S.-Mexico-Canada Agreement, or USMCA, covering a region that trades more than $1 trillion annually.

“You know 95 percent of what we will be voting on is the same as Nafta," Grassley said.

The new deal tightens rules for car content in North America, provides more access for U.S. farmers to Canada’s dairy market, and updates intellectual-property rules for the digital era, among other things.

Trump had threatened repeatedly to pull out of Nafta, a scenario that business leaders warned would wreak havoc on their supply chains. In force since 1994, the pact eliminated tariffs on most goods. But Trump argued the U.S. had lost jobs to Mexico and had seen a trade deficit swell with its southern neighbor.

Grassley said that Trump hasn’t brought up withdrawing from Nafta lately, but he could do so as a threat to induce Congress to act quickly to ratify the deal.

Democrats are already making demands in exchange for their support of the deal. On Monday, Michigan Representative Sander Levin said Mexico would need to revise its labor laws to boost wages before Congress votes on the new deal. Senate Finance Committee top Democrat Ron Wyden suggested changes may be needed to dispute-settlement procedures that act as an enforcement mechanism in the deal.

“The last thing that is needed right now, at a time of great public frustration with what’s going on with Washington, is ramming this through,” said Wyden of Oregon.

GOP Senator Pat Toomey of Pennsylvania said in a statement he is concerned about flaws in the new deal, including its 16-year sunset date, failure to remove steel tariffs and wage requirements connected to auto imports.

"I also plan to work closely with my colleagues to explore how we may correct some of the agreement’s flaws through the required implementing legislation," he said.
— With assistance by Andrew Mayeda, Eric Martin, and Josh Wingrove
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