US advances new trade agreement with Mexico and Canada

House Speaker Nancy Pelosi, D-Calif., said the replacement to the 25-year-old trade agreement between the U.S., Canada and Mexico is now ready to move forward to ratification.

“There is no question, of course, that this trade agreement is much better than NAFTA. But in terms of our work here, it is infinitely better than what was initially proposed by the [Trump] administration,” Pelosi said in a Dec. 10 news conference.

She added that the U.S.-Mexico-Canada Agreement (USMCA) is “a victory for America’s workers.”

Richard Neal, D-Mass., chairman of the House Ways and Means Committee, said there was “a round of intense finishing conversations and negotiations” starting the morning of Dec. 7 between the House leadership and U.S. Trade Representative Robert Lighthizer.

“This is a transformative agreement. This is a template, I believe, for future agreements. Our constant emphasis was on enforceability,” Neal said. “It’s a triumph for workers across America.”

A House working group strengthened the USMCA labor standards and environmental chapters, enhanced the verification mechanisms for environmental trade and preserved Congress’ ability to change U.S. law to address high prescription drug prices, he said.

Neal said “USMCA deserved a vote because it’s an agreement that Democrats shaped,” but acknowledged that the negotiations were often heated between lawmakers and with the U.S. trade representative. “We knew at the same time that this was an opportunity that we couldn’t let get away from us.” 

In a statement released after the press conference, Lighthizer said, “After working with Republicans, Democrats and many other stakeholders for the past two years, we have created a deal that will benefit American workers, farmers and ranchers for years to come.” 

Lighthizer said the agreement “will be the model for American trade deals going forward.”  

Neal said he will travel to Mexico with the U.S. delegation to meet with the president of Mexico and from there to Canada to meet with the prime minister.

Mexico’s President Andrés Manuel López Obrador in a morning press conference said that there were pressures from U.S. sectors regarding labor issues, dispute resolution, steel, aluminum and human rights, but that “we comply with everything.”

Canadian Prime Minister Justin Trudeau in a Dec. 9 tweet said, “I spoke with @POTUS this evening about the continued progress made on the new NAFTA, and the jobs & opportunities it will create for people on both sides of the border.”

The House USMCA announcement was made an hour after the articles of impeachment against President Trump were announced.

“Looking like very good Democrat support for USMCA. That would be great for our Country!” President Trump tweeted earlier in the morning.

On Dec. 10 at 1 p.m., a USMCA signing ceremony was held in Mexico City, which included Lighthizer, Mexico trade negotiator Jesus Seade, and Canadian Deputy Prime Minister Chrystia Freeland.

“I’m glad a deal has finally been reached. I look forward to reviewing the specific language soon and expect committee members will be briefed in person by USTR this week,” said Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said.

While the House is expected to vote on the USMCA later this week or early next, Senate Majority Leader Mitch McConnell, R-Ky., reportedly said the chamber will not take up the trade agreement until after the Senate impeachment trial.

USMCA will replace the North America Free Trade Agreement, which entered force on Jan. 1, 1994.

On May 18, 2017, Lighthizer informed Congress that President Trump intended to commence negotiations with Canada and Mexico with respect to NAFTA. Negotiations among the three nations to replace NAFTA concluded in September 2018. Mexico signed the USMCA into law, but the U.S. and Canadian lawmakers still had concerns.

Numerous trade associations have lobbied Congress during the past year and a half to pass the USMCA and foresee numerous benefits to their industries under the modernized trade agreement.

“We are optimistic this development will open the door to final approval of USMCA on a bipartisan basis by the end of the year, which will especially benefit American farmers, manufacturers and small businesses,” said U.S. Chamber of Commerce CEO Thomas J. Donohue in a statement. “We look forward to reviewing the details of the deal with our members and assessing their impact.”

National Association of Manufacturers President and CEO Jay Timmons said a ratified USMCA will “deliver increased certainty for manufacturers — especially for the 2 million manufacturing workers whose jobs depend on North American trade.”

However, he expressed disappointment that the USMCA fell short on intellectual property rights protections. “Protection of intellectual property is a key principle and critical for the long-term vitality of the manufacturing industry and the men and women who work in our sector,” Timmons said.

FreightWaves reporters Noi Mahoney and Nate Tabak contributed to this news report.