Speaker Nancy Pelosi claimed victory for House Democrats Tuesday, saying they had reshaped a trade agreement designed to replace the long vilified 1994 North American Free Trade Agreement that organized labor has blamed for manufacturing jobs lost to Mexico.
In a sign of the potential political importance of the agreement to a core constituency, Pelosi and House Ways and Means Chairman Richard E. Neal, D-Mass., repeatedly thanked Richard Trumka, president of the influential AFL-CIO, for prodding Democrats to get the best deal possible for enforcement of new ambitious labor laws in Mexico that include workers’ right to form unions to negotiate for better pay and work conditions.
Trumka was not at the press conference. He endorsed the changes in a statement in which he said President Donald Trump “may have opened this deal. But working people closed it.” He noted specific provisions make for a fairer trade agreement.
The Democrats and Trump appear to see the agreement as a rallying issue as they head into 2020 elections. Vice President Mike Pence said House Democrats “fully” caved to the administration’s demands in the talks. He credited the “strong leadership of President Trump.”
Pelosi and Neal were flanked by more than 30 other Democratic lawmakers, including members of a working group Pelosi assigned to negotiate changes to the agreement reached by U.S. Trade Representative Robert Lighthizer and members of the moderate New Democrat Coalition.
Lighthizer and Canadian Deputy Prime Minister Chrystia Freeland were in Mexico City on Tuesday to sign the revised agreement. The three countries signed the proposed trade agreement on Nov. 30, 2018. The Mexican Senate ratified USMCA in June.
“It is infinitely better than what was initially proposed by the administration,” said Pelosi, D-Calif.
“For the first time, there truly will be enforceable labor standards — including a process that allows for the inspections of factories and facilities that are not living up to their obligations,″ Trumka said. “The USMCA also eliminates special carve outs for corporations like the giveaway to Big Pharma in the administration’s initial proposal and loopholes designed to make it harder to prosecute labor violations.”
The new USMCA will include provisions that allow U.S. inspections of plants in Mexico for labor violations while giving Mexican officials some oversight of the process. The Mexican government had objected to a U.S. proposal it said would have allowed unannounced U.S. inspections and little Mexican involvement.
Rep. Jimmy Gomez, D-Calif., a member of a Pelosi-appointed working group, said Mexican officials will review violation complaints and the U.S. will have observers who go into factories. If there is no resolution of a complaint, it would proceed to a three-person panel comprised of Mexican, U.S. and Canadian “verifiers” who will determine if there is a violation. They will establish the remedies a company must take to fix the violation.
Gomez, who handled labor enforcement for the working group, said Mexicans “did not want rogue inspectors, which I always said there wasn’t going to be, going into their factories.”
Neal said there is no date yet for a floor vote on implementing legislation for USMCA, but he said he hopes it could happen next week, the last scheduled legislative week for the House this year. Under Trade Promotion Authority (PL 114-26), the House votes first on the agreement followed by the Senate. It is unclear if either chamber will have to hold mock markups of draft implementing legislation for the agreement as laid out the trade promotion statute. The law allots 90 days for Congress to act once it received an implementing bill.
Senate Finance Chairman Charles E. Grassley, R-Iowa, said there may be Republicans concerned about concessions to Democrats. He doesn’t think the number will be large enough to affect approval.
“Republicans have to realize that the House of Representatives controls half the Congress and there has to be some accommodation as a result of the last election,” Grassley said. “Elections have consequences.”
Senate Majority Leader Mitch McConnell, R-Ky., said the Senate won’t consider the pact before it breaks for Christmas. He also said it would probably occur after a Trump impeachment trial if the House approves articles of impeachment.
The reworked USMCA deals a blow to pharmaceutical companies. Provisions that would have given pharmaceutical companies 10-year monopoly pricing for biologic drugs are gone, as is language that would have allowed drug companies to delay competition from generic drugs by tweaking products already on the market in order to get new patents.
“The only winners today are foreign governments who want to steal American intellectual property and free ride on America’s global leadership in biopharmaceutical research and development,” Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America, said in a statement.
Claims of environmental infractions would be elevated for enforcement actions, and revisions call for attaches focused on environmental issues to be based in Mexico City to monitor that country’s environmental laws, regulations and practices. The changes call for a new authorization of the North American Development Bank and money for grants from the Environmental Protection Agency for the Border Water Infrastructure Program to remedy pollution on the U.S.-Mexico border.
The announcement of the agreement with the administration came the same day the House Judiciary Committee unveiled articles of impeachment against Trump.
Pelosi told reporters the two events were unrelated. She said the deal on USMCA was done on a timeline of getting concessions and agreements. Now, she said, is the time to act on a trade agreement that will provide a template for labor enforcement and other areas for future trade pacts.
But the likelihood of a USMCA vote as the House considers impeachment offers relief for Democrats in swing districts facing a Republican messaging campaign that accused Democrats of being partisan in their impeachment drive and unable to do anything bipartisan.
Rep. Cindy Axne, a freshman Democrat who defeated an incumbent Republican in an Iowa district Trump carried by 3 points, hailed the announcement that USMCA would move forward. She said the agreement would aid farmers in sales to Mexico and Canada.
“I have long been an advocate for getting this agreement done so our farmers and manufacturers can have certainty in our two largest markets,” Axne said in a statement. “I am thankful that the House Working Group and U.S. Trade Representative Lighthizer worked in good faith and negotiated a better deal for all Americans and did so before the year end.”
The centrist New Democrat Coalition noted in a statement that Pelosi had heard their concerns by appointing the group’s vice chairman, Terri A. Sewell of Alabama, to the working group. Sewell, the coalition said, had a hand in negotiating “improvements to the enforcement of the agreement that are critical for gaining our Members’ support. We look forward to reviewing the final USMCA and working with our colleagues on its path forward in the House.”
The political stakes for Democrats were underlined by liberal groups that questioned the rationale of striking any agreement with Trump.
“Swing district Democrats won’t win a single new vote by agreeing to pass this trade deal. Meanwhile, Donald Trump will be spending the next 11 months bragging about the trade agreement he ‘alone’ passed, despite the political capital Democrats sunk into making sure NAFTA 2.0 was slightly better than the deal it’s replacing,” Democracy for America CEO Yvette Simpson said in a statement.
Pence’s comments seemed to demonstrate that hazard.
“Speaker Nancy Pelosi and Congressional Democrats have finally acquiesced to the voice of the American people have agreed to allow a vote on USMCA in the House,” Pence said in a statement. The former GOP congressman spent much of the summer and autumn crisscrossing the country on a little-noticed tour to sell the proposed pact to the public.
However, Pelosi told Politico’s Women Rule Summit she expects the president to make outsized claims. The point is not whether Trump gets credit, but whether Democrats were willing to seize a chance to make a better deal, Pelosi said.
“We are miles and miles from what he put forth, He wouldn’t even recognize it, but anyway he’ll claim it,” she said. “I certainly wouldn’t miss an opportunity because the president is the occupant of the White House. If he has collateral benefit, so be it.”
John Bennett, Lindsey McPherson and Niels Lesniewski contributed to this report.