When Democrats take control of the House in January with a younger, more ideologically diverse conference, members will face key decisions about the future of their party’s stance on trade issues as President Donald Trump pursues congressional approval of a renegotiated North American Free Trade Agreement.
On the one hand, Democrats will be reluctant to hand Trump a victory on his rebranded version of NAFTA, the United States-Mexico-Canada Agreement (USMCA). But on the other hand, Trump’s protectionist impulses actually line up quite nicely with Democratic thinking in many cases. For instance, the USMCA includes provisions for increased minimum wage requirements for Mexican autoworkers and a higher percentage of automobile components that must come from North America in order to qualify for duty-free status. Plenty of Democrats agree in principle with these new labor standards.
So how will they square the circle of opposing Trump while not opposing policies they like? (Don’t forget that Democrats were criticizing NAFTA long before Trump decided to run for president.) It seems as though they’re focused on whether or not the provisions they should, theoretically, like will be truly enforceable. As House Minority Leader Nancy Pelosi warned last week, “without enforcement, you don’t have anything.”
Richard Neal, the top Democrat on the House Ways and Means committee, wrote after the plan was released that “the bar for supporting a new NAFTA will be high.” In his statement he stressed enforceability of the deal’s labor and environmental protections, and he indicated Democrats would evaluate whether it marks an improvement over the current 24-year-old trade agreement as well as the Trans-Pacific Partnership. (You’ll recall that TPP was opposed by all of the 2016 Democratic presidential hopefuls and the party’s entire left wing. Trump was the lone Republican candidate to oppose it. He promptly killed it upon entering office.)
Some Democrats fear that the USMCA’s minimum wage requirements—$16 an hour for at least 30 percent of the labor in auto manufacturing in Mexico, with the percentage increasing to 40 percent by 2023—may still not be enough to curb the movement of American manufacturing jobs to Mexico. They also argue that the minimum wage standard should be indexed to inflation. And union leaders have expressed concerns that the agreement does not go far enough to protect U.S. auto workers.
Yet a number of Democratic lawmakers in agricultural states may not have many qualms about passing the trade deal in order to protect commerce amid heightened trade tensions—and they might even try to use the USMCA debate to push for the removal of Trump’s tariffs on foreign steel and aluminum.
“I’m open to considering this deal,” California Democrat Eric Swalwell told THE WEEKLY STANDARD in a phone interview last week. “I’m not going to go into this opposed just because it’s from the president.”
Swalwell lauded the USMCA’s labor components and didn’t offer direct criticism of its substance. He was instead preoccupied with Trump’s steel and aluminum tariffs, which remain in place for Canada and Mexico despite the new agreement. Those tariffs, imposed unilaterally and justified (rather questionably) on national security grounds via Section 232 of the Trade Expansion Act, have in turn led targeted countries to retaliate against a number of American industries. Foremost among them is agriculture.
“We have leverage now that we didn’t have before. So yes, I do think that is a possibility,” Swalwell said when asked if like-minded Democrats would take advantage of the USMCA debate to barter for concessions from the administration on tariffs. “If you look at some of the seats that Republicans lost in this last election, they came in the midwest, where the pain from the president’s tariffs are being felt the most,” Swalwell added.
Trump is expected to sign the deal at the end of November, but according to Trade Promotion Authority’s legislative timeline, it won’t come before lawmakers for consideration until February, after the new Congress has been seated. The deal has fast-track protections that limit debate and prevent filibusters in the Senate. Members also won’t be able to introduce amendments to change the agreement—they’ll have to simply cast an up-or-down vote. If Democrats do want to kill the deal, Politico‘s Megan Cassella points out, they could approach the matter from a procedural lens, perhaps claiming the administration failed to follow TPA requirements in keeping Congress informed throughout negotiations.
U.S. Trade Representative Robert Lighthizer has ruled out the possibility of reopening talks with Mexico, as populist president-elect Andrés Manuel López Obrador, who differs with aspects of the revised USMCA, is set to take office right after the deal is signed by current Mexican President Enrique Peña Nieto at the end of November. Wary Democrats could secure additional assurances from Canada and Mexico regarding environmental and labor protections in side-letters to the agreement, but what those would look like is unclear.
And although Democratic leadership in Congress may be filled with the old guard of more protectionist thinkers, some younger, more business-friendly incoming Democrats could add uncertainty to the mix, said Chad Bown, a senior fellow at the Peterson Institute for International Economics.
“There’s kind of this implicit expectation that these Democrats are going to be like the Democrats of 10 years ago or 15 years ago, but their voters have been changing their preferences,” he told THE WEEKLY STANDARD. “This has been changing over time where you have Republican voters increasingly becoming more protectionist and the Democratic voters becoming more open to trade, more open to globalization, despite the fact that their leadership in Congress and their elected representatives in Congress haven’t kept up.”
This relationship is explored in depth in a recent paper from Scott Lincicome, a trade attorney and adjunct scholar at the Cato Institute. In the paper, titled “The ‘Protectionist Moment’ That Wasn’t,” Lincicome pushes back on the idea that protectionist policies are driven by mass demand from Americans—”Indeed, recent polls show Americans’ support for trade and globalization at or near all-time highs,” he writes. Recent polling also reinforces the idea that public opinion on trade issues can easily shift according to partisanship. Keen observers may have noticed this phenomenon with Republican views on trade during Donald Trump’s rise to prominence.
Lincicome notes that polls taken in the spring and summer of this year, when Trump implemented his tariffs on foreign steel and aluminum, indicated overwhelming support among Republicans for the policy, whereas the typically more trade-skeptical Democrats came down on the other side of the issue.
“Pew, for example, found in July 2018 that 73 percent of Republicans thought increased tariffs between the U.S. and some of its trading partners will be good for the U.S.—up from 58 percent just two months prior,” Lincicome writes. ”Democrats, on the other hand, moved the opposite way: 77 percent thought tariffs would be bad for the U.S.—an increase of 14 percentage points over the same period.”
The Peterson Institute’s Chad Bown says these vast shifts in public opinion are key to assessing how newly empowered Democrats will approach the USMCA debate.
“We’ve got a whole lot of new people, especially on the Democratic side, that have never been in Congress before. How do they feel about trade and are they going to actually represent their voters’ preferences?” he asked. “We just kind of don’t know yet.”
