Trump’s new NAFTA back from the dead

Robert Lighthizer

Top Democrats felt they had reach an understanding with U.S. Trade Representative Robert Lighthizer on the USMCA after a meeting Wednesday. | Chris Kleponis/Getty Images

trade

A meeting with Trump’s top trade official fueled new optimism from House Democrats.

Donald Trump’s flailing domestic agenda received a spark of life on Wednesday, with top lawmakers in both parties expressing new hope that the president’s North American trade pact could be ratified by Congress this year.

Key officials negotiating the deal with Mexico and Canada are working both sides of the Capitol in an effort to ease concerns not only over the provisions of the pact but Trump’s ongoing tariff war with Mexico, Canada, Europe and China.

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Speaker Nancy Pelosi and her leadership team were upbeat about the U.S.-Mexico-Canada Agreement as they left a meeting with Robert Lighthizer, Trump’s top trade official, saying he finally seemed to take heed of their demands to modify the trade deal after weeks of the two sides mostly talking past each other.

And Senate Republicans, who have been critical of Trump’s decision to slap tariffs on U.S. allies, were relieved at signs that the administration appears to be backing off that offensive as part of an end-game agreement with Canada and Mexico, as well as Congress.

“I’m pretty optimistic about it,” said Sen. John Cornyn (R-Texas). “Everybody wants to do it, I saw Mrs. Pelosi say that she wanted labor reforms done by the Mexicans and they proceeded to do the labor reforms. And I think there’s just a broad bipartisan acknowledgment that this is in Americans’ best interest and we ought to get it done.”

Rep. Scott Peters, a pro-trade Democrat from California, said Pelosi would put the trade deal on the floor only when she feels comfortable, but added, “I certainly think when she does that, we’ll have the votes.”

Whether Pelosi is ultimately willing to give Trump a huge bipartisan accomplishment to run on in 2020 is unclear, and her caucus’ left flank is almost certain to oppose the trade deal on its merits.

But the potential shift in attitudes on the Hill comes at a critical moment for Trump, who has faced sharp criticism from Republicans and Democrats over his aggressively protectionist trade agenda. Both parties have major leverage over his trade deal, his top legislative priority.

Pelosi is fighting to ensure that the agreement’s labor and environmental protections are strongly enforceable. And Senate Finance Chairman Chuck Grassley (R-Iowa) says he won’t move the USMCA trade deal as long as tariffs remain on U.S. allies, but he and other Republicans say the administration is finally softening.

Treasury Secretary Steven Mnuchin confirmed on Wednesday that U.S. officials are “close to an understanding with Mexico and Canada,” on the tariffs, which have been in place for nearly a year. “It is a priority of ours.”

Still, lawmakers on both sides of the aisle distanced themselves from Trump’s decision to escalate his trade war with China over the past week. Members also warned that the move could hurt the chances of getting the trade agreement with Mexico and Canada — which already faces an uphill battle — through a divided Congress.

And the new North American trade agreement is a key signal to how the rest of Trump’s first term will go: If he can’t pass that, there’s little hope of getting an immigration or infrastructure deal off the ground.

Yet after weeks of beleaguered whip counts and frustrated lawmakers, the uptick in optimism on Capitol Hill was real on Wednesday.

“There are issues to be sorted out,” said Rep. Rosa DeLauro (D-Conn.), a trade agreement skeptic, after leaving the Lighthizer meeting. “We believe we can get there, but we’re not there yet.”

The U.S. trade chief is doing all he can to court the entire party, meeting with the Congressional Progressive Caucus last week.

Pelosi has made clear that she will not hold a vote until the Trump administration makes changes surrounding enforcement of the replacement deal for NAFTA. Some Democrats have also expressed concern about the deal’s labor and environmental standards, as well as provisions they say would lock in high prescription drug prices, issues they all reiterated to Lighthizer on Wednesday.

Democrats have been more receptive to the deal in recent weeks after Mexico passed a landmark labor reform law required under the pact. But Pelosi has indicated she still needs to see how Mexico implements the reforms.

Pelosi has also specified that she wants to see changes in the underlying text of the agreement — something that Lighthizer as well as Mexican and Canadian officials have repeatedly rejected.

But House Democratic Caucus Chairman Hakeem Jeffries (D-N.Y.) indicated that Lighthizer was not so steadfast against making changes to the text in the meeting this week.

“He didn’t speak one way or the other about the mechanics of reopening the text, but he understood the concerns … and that absent resolution, it would be very difficult to get to yes on the agreement,” Jeffries told POLITICO.

The Trump administration has been intensifying pressure in recent weeks to get the USMCA ratified, with Vice President Mike Pence traveling across the country to showcase the deal.

Pence told Senate Republicans that he has spoken to Canadian Prime Minister Justin Trudeau about moving the agreement through Congress, and Canadian officials are in active talks with the Trump administration on a breakthrough on the tariffs.

Though it’s only May 2019, advocates of the deal know they need to move quickly. As the Democratic presidential campaign ramps up, the possibility of passing new major legislation decreases significantly. Republicans and pro-trade Democrats say that if the legislation can’t pass before the chamber breaks for August, it may stall permanently.

“The window was before the August recess, in part because of politics that already exist. The window hasn’t expanded. Congress can act, but it’s already difficult. It becomes more difficult in time,” said Sen. Jerry Moran (R-Kan.).

“Once it goes beyond October, forget about it,” added Rep. Bill Pascrell (D-N.J.).

Canadian Foreign Minister Chrystia Freeland was also on the Hill on Wednesday to convey the message to lawmakers that the window is closing for Canada to ratify the new pact this year. The Canadian Parliament adjourns in mid-June and will not be back for a normal session until 2020. Ratification efforts could be further complicated next year if the trade deal becomes the subject of controversy in the fall Canadian election.

And if a vote were held in the Senate today, there’s essentially no way the trade agreement would pass given GOP outrage over the tariffs on allies. Though the trade deal can’t be filibustered, Senate Majority Whip John Thune (R-S.D.) said he will need Democratic votes to get it across the finish line. The White House, however, has done little to court Senate Democrats, according to Senate Minority Whip Dick Durbin (D-Ill.).

Instead, Sens. Sherrod Brown (D-Ohio) and Ron Wyden (D-Ore.) are coordinating with House Democrats on enforcement demands to firm up the Democratic whip count. Republicans privately say Pelosi and Senate Democrats will push for more legislative sweeteners, including perhaps a minimum wage increase.

“I could see where Democrats would kind of dig in and want a fight and not give Trump an accomplishment, but I think this is something everybody kind of needs to get done,” said Thune. “And if it doesn’t get done, the alternatives aren’t very good.”

Some Republicans had urged the White House to rush the deal through Congress while the GOP still had the House last winter. The administration didn’t listen, waiting for Pelosi to assume her post as speaker — which some in the GOP are now lamenting.

“We were right, and they were wrong,” said Sen. John Kennedy (R-La.). “Because I don’t know if we’re going to get that thing approved.”

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