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Inside Washington
Lighthizer Senate Finance 061819.jpg Senate Finance Committee

Lighthizer, Pelosi work to advance USMCA

During Senate Finance hearing, USTR ambassador highlights urgency of USMCA approval.

Before the Senate Finance Committee on Tuesday morning, U.S. Trade Representative Ambassador Robert Lighthizer said he hopes to make substantial progress with House leadership over the next couple of weeks in advancing the U.S.-Mexico-Canada Agreement (USMCA).

Contrary to the comments from President Donald Trump regarding how speaker of the House Nancy Pelosi (D., Cal.) has understood and handled USMCA approval, Lighthizer struck a more cordial tone regarding her actions.

“I believe we’re on track,” Lighthizer said, adding that the speaker is “exactly as you would hope she would be” in ongoing discussions.

“She’s put together a good group of people,” Lighthizer said of the working groups Pelosi facilitated to help with any accompanying implementing legislation needed for USMCA. Pelosi has assigned Democrat lawmakers to four negotiating groups to work with the Administration on changes Democrats want made to the agreement's provisions on labor, the environment, pharmaceuticals and enforcement.

Lighthizer added that, since the beginning of negotiations for the updated North American Free Trade Agreement (NAFTA), he has dealt as much with Democrats as with Republicans. In the end, he generally knows what people want but needs somebody on the other side to say, “Yes, this is enough.”

Lighthizer did not want to put an ultimatum on those ongoing discussions for when the Administration would submit implementing legislation if the House fails to act. He said his hope is that USMCA approval has been negotiated in a bipartisan way and will get buy-in because of it. He added that many members of Congress have a major stake in the bill, because provisions from both Democrats and Republicans have been approved as part of the overall USMCA deal.

He explained that USMCA is not just a small free trade agreement but represents $1.4 trillion worth of trade with the number-one and number-two trading partners. He said he believes many members of Congress feel the same sense of urgency as he does to ratify the deal quickly.

Senate Finance Committee ranking member Ron Wyden (D., Ore.) and Sen. Sherrod Brown (D., Ohio) have offered some proposals on how to enforce labor obligations under USMCA -- a major stumbling block that needs to be resolved before some Democrats will support its passage.

In his opening comments, Wyden said, “The new NAFTA retains a weak enforcement system from the old NAFTA, which was too easy on trade cheats.”

Brown welcomed comments from Lighthizer during the hearing that he will do “whatever it takes” to address enforcement concerns in order to get USMCA across the finish line.

Canada's Prime Minister Justin Trudeau has plans to meet with Pelosi and top-ranking members of Congress during a trip to Washington, D.C., this week. He also plans to meet with Trump Thursday, followed by sit-downs with Pelosi and Senate majority leader Mitch McConnell (R., Ky.) later in the day.

Trudeau hopes to get a better sense of the legislative outlook for U.S. passage of USMCA. He must decide whether to push his Parliament to immediately vote on Canada’s USMCA implementation bill, as the body is set to adjourn this week until Oct. 21 after Canada’s federal election. Parliament could be recalled for an emergency session any time prior to September.

A focus on advancing USMCA ahead of the August recess remains the goal of trade agreement supporters. If it trails into the fall or even into early 2020, the bill risks getting caught up in election year politics, as by Sen. John Thune (R., S.D.) noted in his comments during the hearing.

Since NAFTA’s implementation in 1994, agricultural exports to Canada and Mexico have more than quadrupled. Corn exports increased seven-fold, Senate Finance Committee chairman Chuck Grassley (R., Iowa) pointed out.

“American farmers, workers and businesses stand to benefit greatly from USMCA. More market access for agriculture, new commitments in critical areas such as customs, digital trade, intellectual property, labor, environment, currency and the lowering of non-tariff barriers will translate into higher wages, greater productivity and more jobs,” Grassley said.

TAGS: Policy
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