[CTC] White House tries to charm Democrats on new NAFTA

Thu Mar 7 05:51:05 PST 2019

https://www.politico.com/story/2019/03/07/trump-nafta-democrats-1247064

TRADE <https://www.politico.com/trade>
White House tries to charm Democrats on new NAFTA
Trump needs Pelosi’s support before he can claim a victory.
By SABRINA RODRIGUEZ <https://www.politico.com/staff/sabrina-rodriguez> and ANDREW RESTUCCIA <https://www.politico.com/staff/andrew-restuccia> 03/07/2019 05:04 AM EST
The White House is engineering an unusually by-the-book approach for selling Congres’s on the replacement deal for NAFTA — with the hope of persuading Speaker Nancy Pelosi <http://go.politicoemail.com/?qs=cd61db93fd915e2457107e67f58d880c3897339c9927ffb92e33466b75c281cb4b8e2632f7bb5c514391c74c29d2dc68> to hold a vote for the new trade agreement.

Administration officials have been organizing dozens of meetings with rank-and-file lawmakers to try to build bipartisan support for the deal, which restructures trade terms with Canada and Mexico. They're hoping to recapture the success of criminal justice reform legislation, which marked a rare high-point for White House-Hill relations and passed Congress last year following a monthslong behind-the-scenes campaign led by Jared Kushner.

Their goal is to get a vote on the pact by late summer. But their efforts still may come to nothing: While Pelosi hasn't yet staked out a definitive position on the agreement, factions of Democrats are already saying they're not going to vote for it unless there are changes to key provisions, possibly requiring new negotiations with the two U.S. trading partners. Plus, Democrats and GOP lawmakers alike are telling the president they won't consider the deal until he lifts lingering tariffs on steel and aluminum from Mexico and Canada.

"Look, it's going to be very hard to do this," said <http://go.politicoemail.com/?qs=9d5175ea3260173ed131ba4a426bca4871b81b0f39ac7e39da204a8aff3ad29dc680ef18a92adac34f13ab4f5e6ae75e> Rep. Richard Neal <http://go.politicoemail.com/?qs=cc9908d670c2c939ecf4994ea90386b69b4d02aebefadb6ef1d752567fec56197289d0d806e216398f502b11ee8551e2>, chairman of the influential House Ways and Means Committee.

With few legislative options on the horizon, passing the new pact has taken an outsize importance for the administration, especially as Trump hones his reelection message. White House aides said they are aware that the divisive politics of the upcoming election could give Democrats incentive to reject it.

In recent weeks, senior officials from the White House and the U.S. Trade Representative's office have met with Ways and Means Committee members, the House GOP whip team, the Problem Solvers caucus, the Tuesday Group, the Hispanic Caucus and the Blue Dogs. Administration officials are planning to soon meet with the New Democrats, who are widely seen as a key coalition that will ultimately deliver Democratic votes for the deal.

Kushner, the president's son-in-law and senior adviser, is taking the lead in the White House and Deputy U.S. Trade Representative C.J. Mahoney is the point person at USTR, with Robert Lighthizer, the administration's lead trade negotiator, regularly meeting with lawmakers about the issue.

The strategy stands in stark contrast with many of the administration's previous dealings with Capitol Hill, from the failed effort to repeal Obamacare to the tense negotiations over last year's $1.3 trillion spending bill. Lawmakers and senior aides have long complained that the White House lacks a strategy for working with Congress and hasn't done enough to communicate with members, aside from a select group of Republicans who have won the president's admiration.

But Democrats will take a lot of convincing to embrace the new pact, which is known as the U.S.-Mexico-Canada Agreement. Some are demanding that it be renegotiated, while others are waiting for more assurances that USMCA is better than its predecessor, NAFTA. And some lawmakers are withholding their opinions until they see the results of a U.S. International Trade Commission report analyzing the economic impact of the deal, which likely won't be out until mid-April due to a delay from the 35-day government shutdown.

Democrats' concerns center on the enforceability of the pact's labor and environmental standards, as well as prescription drug pricing provisions. It's unclear whether those issues could be solved without heading back to the negotiating table, as some Democrats are advocating.

"I think it's appropriate to open it back up," Rep. Tim Ryan <http://go.politicoemail.com/?qs=7974e1f428978c58a4d42c8ba3dc8ab9eaa712b1c378626893a82aa889e591ec06fb356441806fe908ef294860e7adc7> (D-Ohio), a potential 2020 presidential candidate, told POLITICO. "I want to be supportive of a new NAFTA ... but it's got to be a quality model that protects our workers."

A group of House Democrats are preparing a letter to Trump that would insist on changes to the pact's controversial drug provisions, as they argue that it would lock in high prescription drug prices for years. Organizers of the letter are aiming to have between 100 and 150 lawmakers sign on in support, two House aides told POLITICO.

But at this point, the administration is not inclined to make major changes to the agreement.

"We're not looking to go back and change the deal with Mexico and Canada," a senior administration official said, adding that the two trading partners have not shown a willingness to reopen the text.

Meanwhile, Pelosi is monitoring Democratic concerns, congressional aides say.

The House speaker has echoed some of the prevailing objections, saying earlier this month that "the overarching issue is enforcement." She also indicated that she has "always thought this was probably one of the easier trade agreements to come to agreement on, but, so far, we're not there yet." A spokesman for Pelosi said those comments are "still the best articulation of where she is on USMCA."

Some House Democrats told POLITICO that they believe Pelosi and the party are open-minded about the deal, but that they won't rush to deliver a win for the administration without their input. Some say the onus is on the Trump administration to sell them on why this deal is better than the original NAFTA, which many Democrats have been critical of in the past.

It's still possible Pelosi could slow-walk the deal or shut it down. Congressional aides say they're waiting for Pelosi and House leadership to outline what the ask will be in exchange for Democratic support, saying it's possible she'll look for White House backing on other Democratic policy priorities like infrastructure or the minimum wage.

"She knows this is central to Trump's legislative agenda. So, it's natural that she'll have her own ask," a congressional aide said.

Pelosi's consideration of USMCA could also hinge on how the Trump administration approaches submitting the deal to Congress. Trump has previously threatened to withdraw from the 25-year-old NAFTA as a way to pressure Congress to act on it.

"It would be viewed as bad faith negotiating tactic if the president starts threatening to just blow up NAFTA if he doesn't get the vote for USMCA. That would be disastrous economically," Rep. Ron Kind <http://go.politicoemail.com/?qs=d04cfdce64c71989fcd9c932abb562eeab607df1b51c4aa88dba5d3a48ff096979092f787f7aa8000766b8b41d048d98> (D-Wis.), a member of the free-trade-oriented New Democrat Coalition, told POLITICO. "It would be bad form to jam Congress by going nuclear on NAFTA."

The administration has largely set aside — for now — the threat of pulling out of NAFTA because Lighthizer and others in the administration agree that such a move would undermine the trust they've been working to build on Capitol Hill. Aides said there were no immediate plans to withdraw from the 25-year-old agreement, though the president hasn't completely ruled out doing it eventually if the negotiations over approving USMCA fall apart.

A number of Democrats have praised Lighthizer for his engagement on the Hill, crediting him for often taking their calls to listen to specific concerns and answer questions about provisions in the deal. Some say it's that level of engagement from Lighthizer that will be critical in helping get Pelosi and her House Democratic majority on board. And so far, she seems to be receptive to the U.S. trade chief, indicating that they have "good rapport."

The Trump administration started laying plans to win congressional approval of USMCA almost immediately after the three nations signed the agreement in November.

Over the last two months, the White House Office of Legislative Affairs has talked to more than 275 lawmakers and Hill staffers about USMCA, a White House official said. Lighthizer personally conducted a round of meetings on the Hill last week and has plans to brief more lawmakers in the coming weeks.

At the same time, the White House, led by the public liaison and intergovernmental affairs offices, is trying to build support in states and key congressional districts, briefing local officials and governors on the details of the agreement. The White House is also pushing resolutions of support for USMCA in 16 states, as well as dozens of op-eds. Administration officials are also in regular contact with a spate of outside groups and companies that have formed to advocate for the agreement.

Rick Dearborn, Trump's former deputy chief of staff, said he believes that coordination between the administration and hundreds of business groups, including the U.S. Chamber of Commerce and Pharmaceutical Research and Manufacturers of America, will result in swift approval of the deal. 

"At the end of they day, they have to do something, not nothing," said Dearborn, who now co-leads one of the coalitions to pass USMCA. "I see them coming together and doing that."

Aides said they haven't yet asked the president to make an aggressive public push for approving the deal. But they expect him to get more involved in the coming months. In the spring, Cabinet secretaries and other senior administration officials are also planning to make a more public push to get USMCA passed.

Trump, for his part, has expressed optimism that the deal will "probably" be approved in spite of the hostility Democrats have toward him.

"I know how much they hate me, but they have to hate me even more not to get this deal approved. That's the only thing I can say," Trump told a group of governors at the White House last week.

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