The push to ratify the new North American free trade pact in spite of an impeachment inquiry, dwindling timeline and ongoing concerns about Mexico’s labour reforms shifted to Ottawa Wednesday as a key U.S. Democrat held talks with Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland.
The visit from Rep. Richard Neal, chairman of the powerful U.S. House of Representatives’ Ways and Means Committee, came as news broke that the first hearings in the impeachment probe of U.S. President Donald Trump would begin next week.
Those proceedings, together with Democrat concerns about the enforceability of a promised overhaul to Mexico’s labour laws, have been identified as among the potential roadblocks to ratifying the United States–Mexico–Canada Agreement. Nevertheless, Trudeau remained upbeat about the deal’s chances.
“It is a pleasure to see the positive momentum that seems to be happening on this renewal of this very important trade deal,” Trudeau said at the start of the talks.
The deal, which would replace the existing $1-trillion North American Free Trade Agreement, must win approval from the Democrat-controlled U.S. House of Representatives. The Republicans dominating the U.S. Senate currently support the pact, considered one of Trump’s few victories on trade.
Neal’s Ottawa talks follow a recent visit to Mexico City, where he sought reassurances from President Andrés Manuel López Obrador that Mexico will follow through on a series of labour reforms that include ending employer interference in unions and creating independent labour courts to handle disputes.
Wide gaps in worker rights and wages between Mexico and the U.S. have long been a core issue for Democrats who want to prevent jobs from being lured away from higher-wage U.S. jurisdictions.
A proposal for teams including U.S. officials to inspect Mexican workplaces has prompted concerns about sovereignty, but some Democrats have said the treaty must be reopened in order to build stronger labour rules. Mexico and Canada have repeatedly refused to crack open the pact, forged through 17 months of often-rancorous talks.
“The stance of Canada and Mexico is that it would be like opening a can of worms, so it may be that Neal is testing how hard that position is,” Kimberly Ann Elliott, a Washington trade policy analyst, said. “Or he might be looking for other ways to address Democrat concerns.”
Neal told Global News it was a “mischaracterization” to suggest the party wants to reopen the pact, but said his focus remained on securing labour protections for workers.
“I think what we’re going to prioritize here is clearly the issue of labour enforcement, and we think that on USMCA we’re very close, but we need some guarantees as it relates not just to Canada, but also their help as it relates to Mexico,” Neal said.
Employment, Workforce, and Labour Minister Patti Hajdu, who travelled to Mexico this summer to announce a bilateral working group to help with the reforms, also joined the talks with Neal.
Most of the additional changes the Democrats are seeking would likely appeal to Canada, Elliott said.
In addition to the labour reforms, Democrats are pushing to shorten the rule that provides 10 years of patent protection to eight years for a class of drugs known as biologics. They are also seeking stronger enforcement of environmental laws.
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U.S. Trade Representative Robert Lighthizer has been working to address those concerns in order to submit an implementation bill with enough support to win a vote on the floor of Congress. But each change to appease Democrats risks running afoul of Republicans, Elliott said.
“It is not an easy thing for Lighthizer to square this circle,” she said. “I think the question is how much further he can go while still holding Trump’s and his party’s support.”
But even if Lighthizer manages to satisfy Neal and the Democrats’ demands, there is no guarantee House Speaker Nancy Pelosi will put the deal forward for a vote, said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics in Washington.
As impeachment proceedings pick up in Washington, many believe it will be a tall order for Democrats to give Trump a win on the trade deal, particularly ahead of the 2020 presidential elections.
Pelosi has sought to dispel this notion, insisting the party was working hard to “get to Yes,” on the deal — a sentiment Neal repeated in Ottawa yesterday.
“I do think Neal is making a good faith effort, but whether this happens is above his pay grade,” Hufbauer said. “I still think Pelosi is waiting for an indication from the Democratic presidential candidates on how they see the deal before making up her mind.”
The longer the negotiations continue, the narrower the lane for passing the deal becomes, he added. If the pact languishes too long, it is likely to be sidelined by the presidential elections or by special interest groups demanding changes.
“Individual and interest groups are all shouting ‘me too,’ take care of my problem or grievance,” Hufbauer said.
Some have suggested the deal must be completed by U.S. Thanksgiving. But Elliott believes lawmakers have until the Iowa primaries in January to get it passed.
“The bottom line is there are not a lot of days to get it done,” she said.