Fate of USMCA hinges on Trump and Pelosi agreement

Snowballing signals from the White House of losing patience over the slow pace of ratification of the U.S.-Mexico-Canada Agreement could force a showdown with House Democrats, and there’s a lot at stake for the U.S. ag sector.

“We have to get the Democrats to pass it,” Trump said of the USMCA in a speech Monday. “They may or may not, depending on how they feel politically.”

There are plenty of Democrats in the House who support ratification of USMCA, but it will be up to House Speaker Nancy Pelosi if there is ultimately a vote, and she has stressed she won’t be rushed.

“We are trying to keep the discussion on track and on schedule,” she said in a June press conference. “What the schedule is – is when we come to an agreement.”

But there’s no agreement in sight as Trump and others continue to lobby lawmakers on a quick approval.

“It’s absolutely essential we get the USMCA passed by the Congress, and passed by the Congress this summer,” Vice President Mike Pence said in a speech last week. “It’ll finally give American workers and farmers a level playing field that we need to be able to compete and win.”

Meanwhile, U.S. Trade Representative Robert Lighthizer is expected to sit down with House Democrats again Thursday for what has become a weekly meeting series. Democrats and Republicans have praised the USTR’s outreach, but so far, there’s no concrete evidence the Trump administration is willing to give in on any demands to change the trade pact – something Pelosi and others continue to demand.

Lighthizer met last week with the Trade Working Group, nine Democratic House members tasked by Pelosi to work with the White House on USMCA. The focus last week was on USMCA labor standards and this week they are expected to concentrate on environmental issues.

“It went pretty well, I think,” House Ways and Means Committee Chairman Richard Neal said about the meeting last week. “In fact, we’re making progress. (Lighthizer) has been able to answer many of the questions that have been asked on labor standards and … enforcement.”

But when asked if Lighthizer showed any willingness to agree to Democrats’ demands to make changes to USMCA, Neal said only: “At the moment he seems interested in that.”

Rep. Terri Sewell, D-Ala., another member of the TWG, told Agri-Pulse that Lighthizer seems to be listening earnestly to the lawmakers’ concerns, but hasn’t committed to making changes to USMCA.

“At the end of the day, we’re really trying to get to ‘yes,’ so it was important for him to listen to the concerns that we have,” she said.

But as to Democrats’ demands for new enforcement measures for labor and environmental standards, as well as the removal of a provision to extend patents for biologic pharmaceuticals, Sewell said: “Well, (Lighthizer) hasn’t said no.”

But he also hasn’t said yes.

Both Republicans and Democrats have vocally supported strong enforcement provisions – especially for Mexican labor standards designed to raise wages there and prevent U.S. companies from relocating factories in Mexico – but reopening USMCA is seen as a dangerous proposition.

Opening up USMCA to make a change or two may sound relatively simple, says American Farm Bureau Federation Senior Director David Salmonsen, but it’s not. The fear is that once the trade pact has been opened, it’s hard to shut it back down.

“Maybe Canada or Mexico wasn’t totally happy with something they agreed to … and then they say they want more changes,” Salmonsen said.

If Lighthizer can’t placate Pelosi and other Democrats without agreeing to reopen USMCA, it’s unclear if a resolution can be had. It’s also unclear how Pelosi would react if the White House sends the USMCA implementing language to the Hill before an agreement is reached with House Democrats. Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Association, says he doesn’t believe the Trump administration would take that risk.

“Until she feels comfortable with the terms of agreement and her caucus feels like they can support it, I don’t think the White House is going to gamble sending it up (to the Hill) without being sure … this will pass.” he told Agri-Pulse.

Once the implementing language is sent to Congress – and under the law it can now be sent at any time – the House has 60 legislative days to vote on it and then the Senate has another 30 days after that. But the last time a Republican president (George W. Bush) sent implementing language for a free trade agreement (the Colombia FTA) to the Hill over Democratic protests was in April, 2008. Pelosi was then Speaker and she changed House rules and shelved the pact.

Former House Agriculture Committee Chairman Frank Lucas, R-Okla., says he strongly supports a quick USMCA vote, but also stresses sympathy for Pelosi’s position and does not see reopening the trade pact as a possibility.

“I appreciate the challenge (Pelosi) has on the other side,” he told Agri-Pulse. “I just don’t see the Mexican government going any further than they’ve already gone to accommodate these negotiations. She’s in a tough spot.”

There may be another option, though, according to a cryptic speech by President Trump this week. Without giving any details, he said he has one or maybe two alternative plans.

“We have to get the Democrats to pass it,” he said, but then stressed that “if it doesn’t happen, I have a better plan, so don’t worry about it. You always have to have a plan B (or a) plan C, especially in politics.”

So far Trump is keeping the particulars of plans B and C to himself, but Bacus said he hopes it doesn’t come to that.

“I don’t think we’re ready to explore that because (USMCA) is still the best option in front of us,” he said. “This is something that almost everyone supports and it’s something that’s badly needed for the North American economy.”

For more news, go to www.Agri-Pulse.com.