Democratic congressional leaders and the Trump administration officials are inching towards an agreement on the U.S.-Mexico-Canada Agreement on trade, one GOP leader said Tuesday.
Though progress on the trade deal is slow, Senate Finance Committee Chairman Chuck Grassley said, Democrats are warming up to the idea of adding side agreements to the trade deal, something they had resisted earlier.
“You cannot open it up for going back to the negotiating table with the governments of Canada and Mexico, but you could do what we have done with a lot of free trade agreements. We do what we call ‘side letters’ and ‘annexes’ that kind of state the position of the U.S., how we expect the agreement to be carried out. We could do that. Pelosi and her party are really interested in doing some of those things, along the lines of environment, labor and enforcement,” the Iowa Republican told reporters.
Changes could be tricky, as Mexico has already passed USMCA through its legislature and doesn’t want to have to a second time. Canada’s Parliament, meanwhile, is in recess, but Grassley said he had been assured by Prime Minister Justin Trudeau’s government that they had the necessary votes to pass the agreement. That could change if the deal was changed though. Neither government wants to reopen talks at this point.
House Speaker Nancy Pelosi, D-Calif., is under serious pressure, Grassley said, because while most Democrats want to pass the deal she also has to work with several members that have serious reservations regarding it. Pelosi had previously called for opening USMCA up to full renegotiations.
Asked if Pelosi was now saying the deal needed more extensive tweaks to placate skeptical Democratic colleagues and to be able to say to them she at least tried to reopen negotiations, Grassley replied, “Yes to both questions.”
“I think she is committed to getting to yes, but she has so many new members she has to make them comfortable with it,” Grassley said, adding that U.S. Trade Representative Robert Lighthizer is working with Democrats to find a way to thread this needle. “He thinks he can make arrangements to satisfy they them,” the senator said.
Pelosi’s office did not immediately respond to a Washington Examiner inquiry.
Side agreements that patch up trade deals are a common tool of negotiators, notes Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics. “That has become the normal procedure ever since NAFTA was ratified with side letters back in 1993. The negotiators always assert there will be no changes to the agreed text but to get congressional ratification they agree to just those changes that buy enough votes for ratification,” he told the Washington Examiner.
USMCA would replace the North American Free Trade Agreement.
Democrats, including Pelosi, have argued that the USMCA lacks sufficient enforcement mechanisms and have previously called on the administration to reopen talks with Mexico and Canada . In recent weeks however, Democrat have signaled they will settle for less than that. Rep. Earl Blumenauer, who chairs the Ways and Means subcommittee for trade, told reporters last week that only minor changes were needed.
“It doesn’t have to be a renegotiation of the agreement by the three countries … So, no, I don’t think we are talking about starting from scratch,” said the Oregon Democrat.
Meanwhile, Canada has signaled that while renegotiations were out of the question, they were open to something short of that that would alter USMCA.
“We recognize, however, that the U.S. is going through its process and we remain alert to potential challenges and opportunities that may come through that process,” Canadian Prime Minister Justin Trudeau told reporters late last month.
