WASHINGTON—Yes, the leaders of Canada, the U.S. and Mexico have a deal on a new trade agreement.
No, that does not mean the negotiations are definitely over.
The legislatures of all three countries have to approve the new U.S.-Mexico-Canada Agreement for it to come into effect. And the Democrats who have won back control of the House of Representatives, one half of the U.S. Congress, have signalled this week that they are not ready to vote for the deal as it stands.
“There are certainly some improvements in the USMCA over the previous NAFTA, but the jury is still out as to whether this deal meets my standard for a better deal for American workers,” Rep. Bill Pascrell, the top Democrat on a House subcommittee on trade, said at a hearing on the USMCA in Washington on Thursday.
Trump’s team said it was designing a deal that would win the support of the U.S. labour movement, a key ally of Democrats and traditionally an opponent of trade agreements. But the AFL-CIO labour coalition said Thursday that it was reserving judgment.
“While there are positive changes in it,” such as improved terms on labour and manufacturing rules, “it is not obvious that the improvements are sufficient to make a meaningful difference to jobs and wages or to Mexico’s protection union regime,” AFL-CIO trade policy specialist Celeste Drake testified. She added: “Other rules in the agreement undermine the interests of working families.”
The complaints from the left have been largely centred on what they see as the weakness of provisions meant to compel Mexico to raise its wages and improve its labour standards. They see Mexico’s labour regime as one of the key reasons companies have shifted manufacturing jobs away from the U.S.
The Trump administration took steps to address Mexican labour, but unions and some Democrats say they have not done enough to guarantee the enforcement of provisions meant to compel changes. The left has also quibbled with particular provisions. Unions say, for example, that a new rule requiring a certain percentage of a car to be made by workers earning at least $16 (U.S.) per hour needs to be indexed to inflation so it doesn’t get softer over time.
Rep. Nancy Pelosi may be returned to her previous post as House speaker when Democrats take control in January. Under Pelosi, House Democrats took more than four years to approve trade agreements made by another Republican president, George W. Bush — and only after Democrat Barack Obama got elected and made changes to those texts.
“Right now, it is a work in progress,” Pelosi told the New York Times.
Changes could be made through either the main text of the agreement or through so-called “side letters,” like those added to the original NAFTA by Democrat Bill Clinton. The original NAFTA will remain in effect as the debate plays out.
At the Thursday hearing, representatives for the auto industry criticized the Trump administration for not removing its tariffs on imports of steel and aluminum from Canada and Mexico, saying the tariffs were raising costs.
They also warned that they would be hurt by the quotas Trump has been said to be considering in exchange for lifting the tariffs.
“We believe that imposing quotas on Mexico and Canada will also severely harm our global competitiveness by ensuring that the price of U.S.-made steel and aluminum will remain significantly higher than the prices paid for these commodities by automakers that produce their vehicles elsewhere,” said American Automotive Policy Council president Matt Blunt. “We have, therefore, urged the administration to move quickly and engage with Mexico and Canada to resolve these tariff issues, without resorting to quotas, prior to the signing of the USMCA later this month.”
Daniel Dale is the Star’s Washington bureau chief. He covers U.S. politics and current affairs. Follow him on Twitter: @ddale8