President Donald Trump is a re-gifter. The question is whether soon-to-be House Speaker Nancy Pelosi, D-Calif., will be impressed.
Trump signed a symbolic trade deal with Canada and Mexico at the G-20 Summit last week. Despite the pageantry and the new name, the U.S.-Mexico-Canada Agreement, trade analysts agree that the deal makes only marginal changes to the North American Free Trade Agreement. Now Congress has six months to accept or pass entirely on what is essentially a rewrapped and slightly refurbished NAFTA.
More than likely, that decision will belongs to Pelosi in the New Year. Odds are good she won’t look favorably on the package for two reasons.
First, Democrats aren’t eager to boost Trump’s stock as deal-maker. Two years into his presidency he has precious little to show for his supposed negotiation prowess in terms of tangible results. An enduring drought helps Democrats turn the center against Trump.
Plus Pelosi has a thing for rejecting trade deals. Then-President George W. Bush wanted a new trade deal with Colombia in 2008. She refused to consider the details or even schedule a vote. Six months ahead of Election Day, the trade package withered and died on the vine.
Bad for trade but good for politics, this strategy would likely be favored by Democratic presidential candidates. Every single contender opposed the Obama-era Trans-Pacific Partnership deal in 2016. As Eric Boehm points out over at Reason, even Hillary Clinton, who initially backed TPP, ended up opposing the trade deal in the end.
The reworked NAFTA package includes new labor standards designed to appeal to Democrats and their labor union constituency. It would require 75 percent of automobiles be produced in North America and that 40 percent of those vehicles and their components be manufactured by workers making a $16 minimum hourly wage.
But if the actions since by General Motors and the United Auto Workers union are any indication, Pelosi will shrug her shoulders at that pro-labor package.
Capital and labor already agree that a new NAFTA won’t save Detroit. It increases production costs, giving manufacturers just another incentive to move plants overseas. GM announced plans to shutter plants across the country last week. And UAW President Gary Jones panned the agreement Friday as “not strong enough to protect American workers.”
The politics and the policy give Pelosi a strong hand to demand the White House include more pro-labor proposals in the final package. If they don’t, it’s no skin off her nose. The next speaker can just sit back, watch the trade deal explode, and blame Republicans. She has done it before.
If Trump wants a new NAFTA, his best bet is moving now while Republicans still control Congress.
[Related: Trump signs USMCA trade deal, which if approved by Congress would update NAFTA]
