[CTC] Getting closer to a deal on NAFTA 2.0

[Arthur Stamoulis]

Politico Morning Trade

— U.S. Trade Representative Robert Lighthizer and House Democrats negotiating changes to the new North American trade pact have narrowed down the number of issues they are working through in talks. Specifics about labor rules, cross-border pollution and pharmaceuticals are among the outstanding matters.

GETTING CLOSER TO A DEAL ON USMCA: The number of outstanding issues House Democrats want addressed in the Trump administration's new North American trade pact is getting smaller as dealmaking intensifies for getting a vote on a pact this year. 

What's left?: Some of those outstanding issues left include: figuring out the specifics of a labor inspection process to ensure Mexican factories are upholding the deal's labor rules; the extent of support for new infrastructure to prevent cross-border pollution; and a compromise on intellectual property provisions related to biologics, according to people close to the talks. 

House Ways and Means Chairman Richard Neal <http://go.politicoemail.com/?qs=056ac54763f9cfb3f1ce6ee8cac842517ecd8ec261818752c1d0b900b66eb5810faf98b870d4c6ba637eb86ddc71c77a> (D-Mass.) acknowledged last week that "a lot" of issues are off the table and that he felt "pretty good" <http://go.politicoemail.com/?qs=056ac54763f9cfb396e9181b10ec847b261df293d036f1aac8f030be15fc26f8a2b098296b522163a5f2dc0071eceec9> about where negotiations stood. Neal declined to offer specifics but said "we have really narrowed our differences considerably."

Labor issues still remain: Staff from the Hill and USTR are trying to figure out the finer points of a labor inspection process including what constitutes a violation, what could trigger an inspection and issues related to due process, people familiar with the issue told Morning Trade. 

Mexico has pushed back against the general notion of subjecting factories to inspections — an idea first proposed by Sens. Sherrod Brown <http://go.politicoemail.com/?qs=056ac54763f9cfb3f988b949217f378f5314981e4d7a8f72997923c0f666e59de9107f3ee8b4b230e299ae427bc1633c> (D-Ohio) and Ron Wyden <http://go.politicoemail.com/?qs=056ac54763f9cfb3940fcf5dcfb8c449af53dab429e0f42367be37a13a471a54e6a91d7161ad1dc344d85b33cdaa7f9f> (D-Ore.).

Certifying issues: Democrats have also been pushing USTR for details on a requirement that Mexico provide a certification on the implementation of its labor reforms, the people said. It's unclear if this would be similar to certification processes in previous U.S. trade deals, which allow the administration to withhold the benefits of a pact until it certifies that another country has implemented all the domestic legislation required for the deal.

Pension protections: In another sign that the process is progressing, Neal said he approached Treasury Secretary Steven Mnuchin to get the administration's view on attaching legislation to the trade bill that would help protect pensions for union members. The Butch Lewis Act passed the House this year but has yet to be taken up in the Senate. 

Grassley said last week that he was putting together a legislative package on the pension issue but preferred not to see it attached to USMCA. "I haven't had a conversation with Neal on that," he said. "But I think I'd like to see the two issues handled separately."

Richard Trumka, president of AFL-CIO, told The Washington Post <http://go.politicoemail.com/?qs=056ac54763f9cfb358df6c0db4c89230d4cda3fad6ed37fdc350eac66b893734509153dcdbf93dc1a080a73c30fb3222>that tying the pension overhaul legislation would not be enough to get the nation's largest labor organization to back to the deal. "You can't take a bad bill and try to hide it with another bill and expect people to think it's good," Trumka said.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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