A Deal On USMCA, But Final Approval Will Wait Until 2020
U.S. farmers and ranchers would see modest gains in food and agriculture exports under the revised North American trade agreement announced by the White House and House Democrats on Tuesday, the same day the House moved closer to impeaching President Trump. Farm groups called for speedy approval of the United States-Mexico-Canada Agreement, but Senate Majority Leader Mitch McConnell said a Senate vote, the last step in congressional approval, would be held after the impeachment trial, expected in January.
The administration and House Democrats spent months refining labor, environmental, pharmaceutical, and enforcement provisions in the USMCA. They left alone agricultural provisions that expand the U.S. share of the dairy market in Canada and give fairer treatment to U.S. wheat. Most important to farm groups, the new NAFTA preserves duty-free access to Canada and Mexico for most U.S. agriculture products.
In April, the U.S. International Trade Commission estimated U.S. food and ag trade would grow by $2.2 billion, or 1.1%, when the USMCA was fully implemented. Canada and Mexico are the two largest customers for U.S. farm exports, accounting for one third of sales.
Chief Executive Jim Mulhern of the National Milk Producers Federation said the revamped enforcement sections of USMCA will provide additional protection to U.S. producers so “if our trading partners flout their dairy obligations under the trade deal, the United States has the tools it needs to vigorously enforce our rights. An already good deal for U.S. dairy farmers is even better now,” he said.
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House Democrats said the revised USMCA “closed enforcement loopholes and streamlined the dispute settlement system” by changes that included removal of language allowing a nation to block the formation of a dispute settlement panel and by creating rules of evidence to use in litigating labor, environmental and other fact-intensive disputes.”
Agreement on the tri-national trade pact “shows that Washington can still get things done on a bipartisan basis,” said the American Farm Bureau Federation, the largest U.S. farm group. “We urge Congress to work toward speedy approval.”
Massachusetts Representative Richard Neal, chairman of the House Ways and Means Committee, said lawmakers would be given time to review the reworked USMCA and saw “no reason for unnecessary delay” in calling a vote in the House. Under the Constitution, the House must act first on legislation to implement USMCA because it affects tariffs, which are taxes. Speaker Nancy Pelosi suggested during a news conference that a vote might be held yet this month.
However, McConnell said the Senate has a jammed agenda already, particularly with a short-term government funding bill expiring on December 20, so the USMCA would have to wait. “What has been true for months is especially true now that time is short: It is going to take bipartisan collaboration and hard work for any of these outstanding legislative priorities to become law,” said McConnell. Roll Call said, “McConnell indicated the USMCA vote will likely come after the Trump impeachment trial.”
The administration and House Democrats exchanged gibes over the fruit of their long USMCA negotiations. The White House said USMCA is “a huge win for American workers, farmers, ranchers, labor unions, and businesses” and that Canada and Mexico had agreed to “these few reforms” on enforcement mechanisms. Pelosi, Neal, and other Democrats said the USMCA was immeasurably improved by their work. “This is no longer NAFTA Light,” said California Democrat Jimmy Gomez.
Pelosi said it was coincidental in the final days of this year’s legislative session that the agreement was announced on the same day the House Judiciary Committee began consideration of impeachment articles. Trump told reporters the USMCA deal was a “silver lining” to impeachment and the Democrats felt compelled to “muffle” their work on impeachment with USMCA out of “embarrassment.”
For a four-page Ways and Means description of changes to the USMCA, click here.