President Trump’s United States-Mexico-Canada Agreement on trade gained approval at the House committee level Tuesday, setting up a vote on passage by the full chamber later this week.
The Ways and Means Committee approved the deal by voice vote, marking a rare moment of bipartisan cooperation between Congress and the White House. Members of both parties cited the deal as proof that Congress could advance meaningful legislation despite the effort to impeach Trump.
“These changes set a new standard for U.S. trade agreements and demonstrate that trade agreements can achieve broad bipartisan support if they empower workers, protect patients’ access to affordable healthcare, and improve our shared environment,” said Ways and Means Committee Chairman Richard Neal, a Massachusetts Democrat.
The trade deal, which would replace the 1993 North American Free Trade Agreement, was agreed on by the three countries last year but had been stalled in Congress until last week. Democrats argued the deal lacked sufficient enforcement mechanisms, especially for its labor rights provisions, and negotiated for months with the U.S. Trade Representative’s Office to reach a compromise.
“We are a bit frustrated. This should have happened months ago,” said Texas Rep. Kevin Brady, the committee’s top Republican. He noted that the delays meant that the Senate would not be able to pass the trade deal until next year.
The deal reached last week involves creating a system to inspect Mexican factories to ensure they are complying with the terms of the deal. Mexico objected to giving U.S. inspectors access to its factories and sought reassurance from the U.S. Monday that inspections would be done by independent groups. Instead, the U.S. would send ‘attaches’ to U.S. embassies in Mexico to help with enforcement.
“In the past 25 years, we’ve seen the shortcomings of the original agreement, much of which comes down to a lack of enforcement, in my view. House Democrats fixed that issue,” Neal said.
Some Democrats argued that USMCA did not go far enough in some areas but said that those shortcomings are not reason enough to oppose it. “We must not let the perfect be the enemy of the good, and this deal is good,” said Rep. John Lewis, a Georgia Democrat.
The USMCA keeps most of the elements of NAFTA intact but requires that 75% of an automobile’s parts must be made in North America to be duty free, up from 62.5%. In addition, the deal says that at least 40%-45% of a car’s components must be made by factory workers earning at $16 an hour or its equivalent. The measures are meant to limit Mexico’s competitive advantage on labor costs. The USMCA also expands access to Canadian dairy markets for U.S. farmers, among other provisions. It protects digital trade by ensuring free movement of data across borders.
A study of USMCA by the International Trade Commission found that it would have a modestly positive effect on the economy. It would raise U.S. GDP by $68 billion, about 0.35%, and add 176,000 jobs, an increase of 0.12% in employment nationwide.
