Incredibly, the decade has ended with a moment of bipartisanship. On Dec. 10, after more than a year of deadlock, Democrats and Republicans agreed to revisions in the U.S.-Mexico-Canada Agreement (USMCA) that should enable the trade pact to win approval from Congress and get signed into law by the president. Can we get an “amen”?
“Manufacturers support the USMCA, and we are encouraged that the administration and House Democrats have forged a path forward,” said Jay Timmons, president of the National Association of Manufacturers. “A ratified USMCA will deliver increased certainty for manufacturers.”
“We have secured an agreement that working people can proudly support,” declared AFL-CIO president Richard Trumka, who commended U.S. trade representative Robert Lighthizer “for being a straight shooter and an honest broker.”
It seems the lions truly have lain down with the lambs.
The USMCA is an updated version of the 1994 North American Free Trade Agreement, which eliminated trade barriers between the U.S., Mexico and Canada. The USMCA could be good for U.S. assemblers. For example, cars must be built with at least 75 percent of parts made in North America, up from 62.5 percent under NAFTA. In addition, 70 percent of the steel, aluminum and glass used to make a vehicle must also originate in North America. Another provision specifies that 40 to 45 percent of a vehicle must be made by workers earning at least $16 an hour.
The initial USMCA agreement was signed by leaders of the three countries back in November 2018, but the deal has not been ratified by any of the countries’ legislatures. In the U.S., the stumbling block was House Democrats. To get their support, they demanded changes intended to protect labor and the environment.
For example, the revised agreement calls for inspections of Mexican factories to ensure safe working conditions. It also supports labor laws that will allow Mexican workers to form independent unions and give them more control over their contracts. The revised deal outlines benchmarks that Mexico will have to meet as it reforms its labor laws. If it fails to meet those benchmarks, the U.S. or Canada could take a series of enforcement measures.
Democrats were also able to remove a provision that would have given the pharmaceutical industry more intellectual property protection.
For its part, the Trump administration maintained most of the provisions it had requested in the original USMCA, with one additional win: It kept in provisions intended to shield online platforms such as Facebook and Twitter from liability for their users’ content—something Democrats pushed to eliminate.
Both sides claimed victory. Speaker of the House Nancy Pelosi said the revamped deal was “infinitely better than what was initially proposed by the administration.” The White House called the deal a “huge win” for American workers, farmers and businesses. Let’s hope the spirit of cooperation lasts.