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January 19, 2020

12/12/2019 7:30:00 AM
House Democrats reach deal with Trump on trade
New USMCA would replace NAFTA

Richard Moore
Investigative Reporter


The Trump administration and House Democrats reached a major deal this week to move forward with the Trump administration's replacement of NAFTA, the North American Free Trade Agreement, with a new pact, known as the United States-Mexico-Canada Agreement.

Democrats in the U.S. House had resisted the deal for more than a year before a breakthrough was announced this week.

It could be a big win for American farmers and manufacturers, especially in Wisconsin. For months now, Wisconsin Republicans had been urging Gov. Tony Evers to add his support for the agreement, and Assembly speaker Robin Vos (R-Rochester) signed onto a letter of state leaders urging Congress to take action.

The letter was signed by leaders from 15 states; in all, 26 state legislators sent a letter to House speaker Nancy Pelosi, House minority leader Kevin McCarthy, Senate majority leader Mitch McConnell, and Senate minority leader Charles Schumer calling on them to ratify the agreement immediately.

"Legislative leaders from across our country agree that Congress must act on the trade deal," Vos said. "The economic future of our states depends on our closest trade partners, and politics shouldn't get in the way of progress."

The letter acknowledged the USMCA's importance to workers, small businesses, and statewide economies, urging Congress to set partisan politics aside and pass the deal.

"Trade with Mexico and Canada is vital to the U.S. economy," the letter stated. "It has been more than two decades, though, since trade with those countries was comprehensively addressed by the North American Free Trade Agreement (NAFTA). It is well past time to modernize our agreement with these important partners."

The lawmakers said the nation needs a 21st-century trade agreement for a 21st-century economy.

"The time is now to put USMCA to work for us here at home," the lawmakers wrote. "This bold new agreement provides the framework for economic growth and increased jobs. It will also establish a much more balanced environment for American workers."

USMCA's updated rules of origin will encourage the production of goods in the United States, the lawmakers wrote, saying that would be a win for both manufacturers and for working men and women.

"The U.S. International Trade Commission estimates that USMCA will increase the United States' GDP by $68.2 billion and create 176,000 jobs," the lawmakers wrote. "This includes 76,800 jobs in the U.S. automotive industry."

Additionally, the lawmakers wrote, USMCA opens up new agricultural markets to U.S. producers and provides updated rules for the effective enforcement of intellectual property rights.

"The agreement also removes barriers for small businesses so they can innovate, expand and hire more employees," they wrote.

Legislators from Ohio, Alabama, Alaska, Arizona, Arkansas, California, Iowa, Michigan, Montana, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Wisconsin signed the letter.

The state Assembly had already approved a resolution in May that claimed the USMCA would strengthen relationships with Mexico and Canada and expand opportunities for Wisconsin exporters. Last month, too, Assembly Republicans sent a letter to Evers, asking him to join them in publicly expressing support for the new trade agreement.



Trump weighs in

Just before the deal was announced, President Donald Trump tweeted that a breakthrough might be coming.

"America's great USMCA trade bill is looking good," the president tweeted. "It will be the best and most important trade deal ever made by the USA. Good for everybody - farmers, manufacturers, energy, unions - tremendous support. Importantly, we will finally end our country's worst trade deal, NAFTA!"

Others in the Midwest were excited, too. Edge Dairy Farmer Cooperative, one of the largest dairy co-ops in the nation, applauded the progress.

"Dairy farmers across the Midwest appreciate the commitment and work of the administration and lawmakers to secure a better trade deal for U.S. dairy farmers," Brody Stapel, president of Edge and a dairy farmer in eastern Wisconsin, said. "Our farmers have been waiting in uncertainty for more than a year for USMCA to get done. So, it's certainly good news to see the deal take this significant step forward. There are more steps to be taken, however, so we are not breathing a full sigh of relief."

Stapel said the USMCA is critical to the long-term success of the U.S. dairy community.

"Mexico is our number one dairy foods export market and Canada is third," Stapel said. "Combined they account for more than $2 billion each year. This agreement would protect those longtime trading relationships and allow for growth in market share. That means economic certainty for businesses, families, employees, and rural communities."

Midwestern food manufacturers also applauded the agreement, among them Jason Culotta, president of the Midwest Food Products Association.

"The Midwest Food Products Association is pleased with the news that the Trump administration and House Democrats have reached agreement concerning the USMCA," Culotta said. "We thank U.S. trade representative Robert Lighthizer, House speaker Nancy Pelosi, House Ways and Means chairman Richard Neal, and members of the House Democrats' Working Group for their perseverance and active participation in forging this historic agreement."

Both U.S. Rep. Jim Sensenbrenner (R-Wisconsin) and U.S. Rep. Mike Gallagher (R-Wisconsin) said the deal was long overdue.

"This is a huge win for America and for Wisconsin," Sensenbrenner said. "It is a boon for our state's dairy farmers, who will have more access to Canadian markets. After enduring months of needless delay, I am eager to vote for the deal and am grateful to the Trump administration for their tireless work reaching an agreement."

Gallagher simply said: "It's about damn time."

The office of the U.S. trade representative says the new agreement will be a win for all North American workers, farmers, ranchers, and businesses, creating more balanced, reciprocal trade that supports high-paying jobs for Americans and grows the North American economy.

Among other things, the administration says, it will create a more level playing field for American workers, including improved rules of origin for automobiles, trucks, and other products, and disciplines on currency manipulation.

It will also benefit American farmers, ranchers, and agribusinesses by modernizing and strengthening food and agriculture trade in North America, and will support a 21st century economy through new protections for U.S. intellectual property, the administration says.

New chapters cover digital trade, anticorruption, and good regulatory practices, as well as a chapter devoted to ensuring that small and medium sized enterprises benefit from the agreement.

Until the new agreement is enacted, the administration says, NAFTA will remain in effect. The USMCA can come into effect following a congressional vote on an implementing bill.

The Trump administration will now submit ratifying legislation to Congress for the House to move forward with approving the agreement.

Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at richardmoorebooks.com.





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