[CTC] House Democrats cite progress, some frustration, in NAFTA talks

[Arthur Stamoulis]

House Democrats cite progress, some frustration, in USMCA talks

By Maria Curi, Inside US Trade
07/11/2019


House Democrats tapped to work with U.S. Trade Representative Robert Lighthizer on outstanding concerns with the U.S.-Mexico-Canada Agreement lauded progress after talks on Wednesday, though one lawmaker assigned to address labor issues said tensions were rising over the pace of negotiations.

The meeting between Lighthizer and select Democrats, appointed by House Speaker Nancy Pelosi (D-CA), focused on USMCA’s labor provisions. Democrats have also flagged the pact’s provisions on the environment, enforcement and pharmaceuticals as areas of concern.

“For sure,” House Ways & Means Chairman Richard Neal (D-MA) said when asked whether progress was being made. Neal leads the working group at large.

“We’re making progress. It’s going smoothly,” Rep. Terri Sewell (D-AL) said.

“Good meetings, good conversation,” Rep. Rosa DeLauro (D-CT) offered.

Sewell and DeLauro are in charge of addressing the enforceability of the deal, which is at the center of the party’s concerns.

Rep. Jimmy Gomez (D-CA), who is in charge of labor issues, painted a less rosy picture.

“It was contentious,” Gomez said of the meeting, adding, “There’s frustration” among Democrats and Trump administration officials over “the pace of things.”

“But I think we’re making progress,” he added. “I think that we’re having good discussions that [Pelosi] laid out on labor, enforcement as well as pharmaceutical” provisions.

Rep. Jan Schakowsky (D-IL), who is in charge of handling pharmaceutical issues, this week spearheaded a letter <https://schakowsky.house.gov/uploads/lighthizermeds.pdf> -- signed by more than 100 Democrats -- calling on the administration to get rid of language in USMCA that would lock in a 10-year exclusivity period for biologic drugs.

Schakowsky said in a press release that she and DeLauro handed the letter to Lighthizer in person on Thursday.

Gomez said environmental issues had not yet been addressed, but would be “soon.”

“Nothing got settled” at the meeting, Neal said, “because the conversation continues.” Wednesday’s meeting was the second time Lighthizer and the working group met, though the trade representative has met several times in the past year with House Democrats to address USMCA.

As far as when Lighthizer might bring formal proposals to the table, Neal said he thinks “we’re inching slowly into that phase.”

“He was going to make sure that what he could do would also be consistent with agreements that have been reached,” Neal said.

The White House is legally in the clear to send a USMCA implementing bill to Congress, but members of the Trump administration have said <https://insidetrade.com/node/166833> they will wait for Pelosi’s go-ahead. MSNBC reported this week <https://www.cnbc.com/2019/07/10/trump-white-house-likely-to-send-usmca-trade-deal-to-congress-after-sept-1.html> that the White House likely will wait until after Sept. 1 to send the draft legislation to the Hill.

Neal said implementing legislation was discussed during Wednesday’s meeting and “it was very helpful” but specifics on when the administration would send the bill to Congress, or what language it could include, were not addressed.

Gomez cautioned that submitting an implementing bill prematurely would only increase Democrats’ “leverage because we have the votes” to decide USMCA’s fate.

The working group is being “very direct on specific language” and “asking the staff to follow up and try to resolve some of the” issues at hand, Gomez said. “Lighthizer is in a position right now where they are trying to defend the product that they have, but they’re going to have to move in order to get the votes.”

Gomez and DeLauro will head to Mexico next weekend to meet with Mexican officials about USMCA issues, including panel blocking <https://insidetrade.com/node/166842> for labor-related disputes. Democrats are particularly worried about language in USMCA that allows a party to block the formation of a dispute-settlement panel, especially if Mexico employed the tactic to avoid a dispute on labor issues.

“We understand that there are certain things Mexico can and cannot do,” Gomez said when asked whether he thought Mexico would give up its right to block dispute-resolution panels. “It is a sovereign country, but we are going to push as hard as possible in a variety of fronts.”

DeLauro, meanwhile, said “I’m just trying to figure out how to get there and back.”

Mexico has already ratified the deal, but Mexican Under Secretary for North America Jesús Seade reportedly has expressed willingness <https://insidetrade.com/node/166815> to resolve U.S. concerns over panel blocking.

Former Mexican chief USMCA negotiator Kenneth Smith Ramos, in an interview with El Financiero <https://twitter.com/ElFinancieroTv/status/1149099810793721856> this week, said the parties' goal during negotiations was to get the deal ratified in all three countries in 2019, before the U.S. presidential campaign heated up, and have it enter into force by Jan. 1, 2020.

However, “If the U.S. continues to delay ratification -- which can happen into 2020 -- then the Plan b for Mexico is that, either way, we have NAFTA,” he said.

If the deal is still under consideration in 2020, Smith Ramos said, “it’s very unlikely” Congress will take it up, but “we’ll continue to have the vigor of NAFTA.”

“Democrats want concessions as well and want to be able to go into 2020 with something to show for,” Smith Ramos said, allowing just a 60 percent chance the deal would pass in the U.S.

Smith Ramos said he didn’t expect Congress to take up USMCA before lawmakers left for an August recess -- a goal of the Trump administration -- because the deal is “too politicized by Democrats whose votes will be expensive.”

Citing a meeting with Pelosi “three weeks ago,” Senate Finance Committee Chairman Chuck Grassley (R-IA) told Inside U.S. Trade on Wednesday his “gut feeling” remained that “Pelosi really is sincerely trying to get to yes.”

“But she’s got a different problem every day with a different subject. She’s got more new members than any Congress since 1974 and she’s got to get them comfortable,” Grassley said.

Wednesday’s meeting is part of that process, he said, adding, “we just got to be patient.”

Neal, meanwhile, said Pelosi “has made clear that those two phenomena” -- USMCA's ratification and the 2020 presidential election -- “are not connected.”

 


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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