Trade deal sparks divisions in K Street

Phramaceutical lobby says changes put 'politics over patients'

K Street has widely welcomed the revamped U.S. trade pact with Canada and Mexico, but some sectors have blasted changes that congressional Democrats negotiated with the administration. (Bill Clark/CQ Roll Call file photo)
K Street has widely welcomed the revamped U.S. trade pact with Canada and Mexico, but some sectors have blasted changes that congressional Democrats negotiated with the administration. (Bill Clark/CQ Roll Call file photo)
Posted December 11, 2019 at 5:00am

One of K Street’s top priorities, a revamped U.S. trade pact with Canada and Mexico, took a major step forward Tuesday, but not all sectors embraced the deal — potentially pitting big-spending organizations against one another.

Odd allies, including the labor group AFL-CIO and the business lobby U.S. Chamber of Commerce, offered support for a redo of the North American Free Trade Agreement, something that President Donald Trump initiated after pledging on the 2016 campaign trail he would replace the 1994 deal.

But pharmaceutical companies, which have pushed for passage of a new U.S.-Mexico-Canada agreement, blasted changes that congressional Democrats negotiated with the administration, particularly the removal of a provision that would have guaranteed makers of high-priced biologic medications at least a decade of market exclusivity for name-brand therapies before other manufacturers could offer cheaper copies.

Stephen Ubl, president and CEO of the drug lobby Pharmaceutical Research and Manufacturers of America, said in a statement the revisions amounted to putting “politics over patients.”

“We cannot support abandoning provisions that protect American companies and raise standards abroad,” he added.

While the pharmaceutical lobby appeared to lose out in the revised deal, other sectors, such as agriculture and financial services, offered praise that even with impeachment proceedings underway in the Democrat-led House, lawmakers and the Trump administration were able to arrive at a deal.

Matt McAlvanah of the Farmers for Free Trade coalition said his group’s effort included a 20,000-mile road trip over the spring and summer that hit 30 states and met with voters and lawmakers alike.  

“Unlike other advocacy groups, we really spent the last year out on the road promoting the benefits of the agreement,” he said.  

Support from potentially vulnerable House Democrats from agriculture-heavy states, such as Iowa’s Cindy Axne and Abby Finkenauer, played a pivotal role. Those members are looking to show their voters in the 2020 elections that the House can move forward on impeaching Trump while also crafting a trade deal with his administration.

Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, said his group was disappointed in the change for biologic drugs and called that a setback.

“Overall, we’re pleased that we’re finally going to move forward,” he told CQ Roll Call. “We would not be supportive of all those provisions, but in the grand scheme of things, we’re still looking at how do we strengthen the U.S.-Mexico-Canada trading relationships. At the end of the day, that means getting USMCA enacted.”

The chamber, which is the biggest spender on K Street lobbying, has held more than 1,000 meetings with lawmakers and congressional staff, according to the group.  

Still, Bradley and other lobbyists said they would carefully review the details.

“We’re convening with our members, but we’ve always viewed it writ large in the context of the overall trading relationship,” he said. 

One group, the Pass USMCA Coalition, spent $270,000 on federal lobbying this year with Cypress Advocacy, Capitol Counsel and the Prism Group, according to lobbying disclosures filed with the House and Senate. Rick Dearborn, a former congressional aide who recently served as Trump’s deputy chief of staff, is the coalition’s executive director. The coalition also includes former Rep. Joseph Crowley, a New York Democrat, who has joined the lobbying firm Squire Patton Boggs.

The coalition’s members include PhRMA as well as the Farmers for Free Trade. The group did not provide comment about where it stood on the revisions.

Meanwhile, the financial services lobby Securities Industry and Financial Markets Association, as well as retailers and cattle ranchers, said they would push hard for the deal’s passage.

“For the first time in any U.S. trade agreement, USMCA includes a prohibition on forced data localization while ensuring regulators maintain the necessary access,” SIFMA President and CEO Ken Bentsen Jr. said in a statement. “SIFMA and its members are now eager to see the necessary legislation introduced, passed and implemented. … We strongly support this outcome and believe it should be replicated in future trade agreements beyond USMCA.”

The Internet Association, which represents companies such as Google, Amazon, eBay and Facebook, similarly said it “found things to like in the new version.”

“The strong digital provisions in the agreement will benefit businesses of all sizes in every state by helping them reach new markets and customers in Mexico and Canada,” the group’s Michael Beckerman said in a statement.

Even though impeachment efforts in the House didn’t stop Democrats from smoothing over a deal, Senate Majority Leader Mitch McConnell said his chamber wouldn’t vote on it until after an impeachment trial, taking any vote to late January or February.  

“Obviously, we have to get it over the finish line both in the House and the Senate,” McAlvanah said.

White House Press Secretary Stephanie Grisham praised the deal in a statement and indicated that the Trump administration would push for its passage before the end of the year, countering McConnell.

“It is long overdue for Congress to take up the USMCA, and we expect to push hard on passing the implementing bill before the end of the year,” she said.

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