House passes reworked North American trade deal in victory for Trump, Democrats & The USMCA is finally done. Here’s what is in it. 19&10DEZ19

nafta was only good for the American and Canadian companies that moved their operations to Mexico, taking advantage of lower wages and less regulation while turning a blind eye to rampant corruption. Working in international trade for almost 30 years I am well aware of the failure of nafta to make shipping to and from Mexico easier and quicker. Corruption and incompetence remains problematic and stifling for trade between the U.S. and Mexico and Canada and Mexico. This new trade deal is supposed to address these issues and hopefully Mexican workers will realize more worker's rights and organizing opportunities as well as better pay and benefits. We also expect stricter environmental regulations that will be enforced in Mexico and a crackdown on tolerated corruption by customs officials.  From the Washington Post.....

House passes reworked North American trade deal in victory for Trump, Democrats

The bill passed by a vote of 385 to 41 and is expected to pass the Senate early next year.

By

Erica Werner 

Dec. 19, 2019 at 5:21 p.m. EST

The House of Representatives voted Thursday in favor of a new trade deal for North America, delivering a hard-fought victory to President Trump and House Speaker Nancy Pelosi (D-Calif.) a day after Democrats impeached the president.

The legislation passed on an overwhelming bipartisan vote of 385 to 41, with a large majority of Democrats approving the deal. The bill’s success came despite intense partisanship on most other fronts in Washington. But these distractions appeared to create cover for negotiators to finalize a trade deal that Trump and Democrats would support.

House passes USMCA trade deal

The revised pact upended the Democratic Party’s long-standing skepticism toward massive trade bills such as the North American Free Trade Agreement, which the new deal would replace. In a further reordering of the politics of trade, the U.S.-Mexico-Canada Agreement has the endorsement of major labor unions including the AFL-CIO. The Senate is expected to act on the package next year.

The outcome is the result of months of frenzied yet secretive negotiations that took place without Pelosi or Trump ever speaking directly, though the new trade rules could be presented as top political accomplishments for both leaders. To circumvent the frayed relationship between the president and the House speaker, Democrats worked directly with U.S. Trade Representative Robert E. Lighthizer, a globalization skeptic who agreed to make numerous adjustments to gain their support.

On Thursday, when Trump was in the White House berating Democrats, Lighthizer stood in the House gallery, waving to lawmakers as the deal sailed through.

“We stuck to it. And so we’ve arrived at this ‘it can never happen’ moment," House Ways and Means Committee Chairman Richard E. Neal (D-Mass.) said in an interview. “I think it is a template for the future.”

The USMCA is finally done. Here's what's in it.

The new U.S.-Mexico-Canada Agreement, or USMCA, was signed a year ago by Trump and the leaders of Canada and Mexico to replace the 25-year-old NAFTA, which Trump campaigned against in 2016 and lambasted as terrible for American workers.

That view was shared by many Democrats and union members who blamed NAFTA for the decline in U.S. manufacturing, making it a rare issue on which Trump found more common ground with Democrats than with Republicans.

Republicans, before Trump became president, had traditionally been much more supportive of “free trade,” or the idea that companies should be able to sell products internationally without facing import barriers. Trump has challenged that idea, saying he is in favor of “free and fair trade.” He has moved to impose tariffs on imports from numerous countries in an effort to pressure companies to relocate jobs to the United States.

“We now have a wonderful deal, and if we didn’t have a good deal, do you know what I would have done?” Trump told supporters Wednesday night at a rally in Michigan. "I would’ve have put tariffs on both countries and that would have been it, right?”

Even after being signed by the leaders of the United States, Canada and Mexico, the USMCA still required approval by the legislatures in all three countries.

That gave Pelosi the opportunity to leverage Trump’s desire for a win on trade, and, with Neal, she engaged forcefully on the issue. She appointed a nine-member group in June that spent months meeting with Lighthizer in various locations around the Capitol, exchanging proposals and working through impasse after impasse. Last month, Pelosi took over the talks and with Neal launched intense negotiations with Lighthizer and with AFL-CIO President Richard Trumka, whose support Pelosi was determined to obtain.

House Democrats, who viewed the initial deal as unacceptable, achieved substantial changes. They jettisoned pharmaceutical protections sought by drug companies and added provisions ensuring higher labor standards in Mexico, quicker dispute resolution, higher environmental standards and stronger enforcement of all elements of the deal.

Winners and Losers in the final USMCA deal.

Trumka’s support was not assured until the final days of talks. As the fall progressed, some moderate and freshman Democrats grew increasingly eager to pass the deal so they could show their constituents they could deliver despite the partisanship gripping Washington. They were under pressure in their districts from ads paid for by the U.S. Chamber of Commerce and visits by Vice President Pence and other administration officials. But Trumka visited the Capitol and urged Democrats to hold out for more. Finally, on the eve of the vote, Trumka released a letter to lawmakers urging them to back the new agreement, declaring that while imperfect, “it does provide a new standard from which to improve upon in future trade negotiations.”

“Rejecting it would leave the deeply flawed existing NAFTA in place for the foreseeable future,” Trumka added.

Indeed, Trump’s threats to withdraw the United States from NAFTA entirely hung over the negotiations, even though opinions differed as to whether it was a step he could legally take. And while Democrats were reluctant to credit the president, who had little if any involvement with the negotiations that took place on Capitol Hill, Republicans were quick to point out that the renegotiated deal ultimately resulted from Trump’s decision to seize on the trade issue during his run for the presidency.

“One lone presidential primary candidate in 2015 stood up and said NAFTA is no good and we need to rip it up,” said Rep. Jason T. Smith (R-Mo.).

Still, a number of Republicans were uncomfortable with the changes negotiated by Democrats, including the exclusion of a 10-year protection period for a costly class of drugs called “biologics” that had been part of the original deal. After holding out for months, the White House agreed to remove the protections in a final concession during the last weekend of talks. For Democrats, that moment vindicated their months of negotiations while also helping to lock down support from Mexican officials who had opposed the pharmaceutical protections all along and nearly bolted at the 11th hour over new labor rules also inserted at the very end.

It was a rare defeat for the powerful pharmaceutical industry, which withdrew its support for the deal after that change was made.

Senate Majority Leader Mitch McConnell (R-Ky.) told reporters last week that the deal was “not as good as I had hoped.”

Pelosi exulted as she described the deal to fellow Democrats in a closed-door meeting last week, telling attendees, “We ate their lunch,” according to a Democratic official who spoke on the condition of anonymity to describe the private remarks.

Trump is reshaping U.S. trade policy, but not at the scale he long promised

Yet the deal left some Democrats, labor unions and environmental groups wanting more. Even as the AFL-CIO, the Teamsters and the United Steelworkers threw their support behind the deal, some other unions remained opposed. The International Association of Machinists and Aerospace Workers, a major AFL-CIO affiliate, wrote to lawmakers warning that the USMCA would not stanch U.S. job losses.

The USMCA is the first multicountry trade deal to be considered by Congress since the United States negotiated a free-trade agreement with a group of Central American nations in 2005. Since then, trade has turned into a torturous issue for the Democratic Party. In the 2016 campaign, Hillary Clinton was forced to renounce her support for a major Pacific Rim trade deal that President Barack Obama had hoped to get through Congress. Obama and Pelosi also battled dramatically over trade when he was president and she was minority leader, making her alliance with Trump on a new version of NAFTA all the more striking.

Even as lawmakers of both parties praised the deal Thursday, Republicans criticized Pelosi for failing to act on it more rapidly. The administration had hoped to pass the deal months before now.

“The only reason Nancy Pelosi ever brought this up is because she impeached the president last night,” House Minority Leader Kevin McCarthy (R-Calif.) said Thursday on Fox Business Network. “She could not go home with impeachment being the case.”

Democrats insisted all along that they would not be rushed, even as Trump sought to increase pressure on Pelosi in recent weeks through angry, barbed remarks on Twitter. The tactic did not seem to work, though, and Democrats held out until most of their concerns were addressed.

Overall, the deal is meant to modernize trade rules among the three countries while also making it harder for other nations to slip products into North America tariff-free.

For example, the deal would require cars or trucks to have 75 percent of their components manufactured in Canada, Mexico or the United States to be moved between countries without tariffs. And more of the work must be done by workers making at least $16 an hour, significantly higher than many workers in Mexico currently earn. The precise impact of this change is unclear, as critics have warned it could push up the cost of motor vehicles.

The pact includes a number of other changes. It requires Canada to open up its milk market to U.S. farmers, increases intellectual property and environmental protections, and creates new safeguards against currency manipulation. It also creates new rules for e-commerce, an area of trade that has boomed since NAFTA was enacted in 1994.

The economic impact of the new trade deal is hard to measure. The White House has said it will lead to the creation of many jobs and new businesses, but other estimates have been more circumspect. For example, the International Trade Commission estimated that the changes would lead to the creation of 50,000 new manufacturing jobs, far short of the millions of factory posts that were eliminated after NAFTA was enacted in 1994.

In the end, it is a deal that Trump and congressional Democrats hope will provide campaign fodder heading into the 2020 election.

“We left a little stuff for the union because we figured to get it signed, we will give a little bit and we did it, and then we have one great deal, and now you have the Democrats trying to take credit for this deal and that is okay,” Trump said Wednesday night in Michigan. “Whatever it takes.”

The USMCA is finally done. Here’s what is in it.

By 

Heather Long 

Dec. 10, 2019 at 5:13 p.m. EST

President Trump notched his first major win on trade Tuesday after Democrats signed off on a new trade deal with Canada and Mexico.

So what exactly does the U.S.-Mexico-Canada Agreement (a.k.a. USMCA) change?

In short, this is “NAFTA 2.0.” The agreement updates the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations, for the 21st century. There are a lot more rules in the USMCA on intellectual property and data, as well as labor and environmental protections.

The White House has yet to release a final copy of the USMCA, so not all details are known. This deal was first announced in September 2018, but Democrats demanded several changes since then. The latest full version of the text, which was released publicly in May, does not include numerous changes negotiated in recent days. One of the biggest question Here’s a rundown of what we know is in the “new NAFTA” so far.

New name. Goodbye, NAFTA. The new deal will be known as the USMCA. Trump, who cares deeply about branding, wanted a new name since he campaigned on ripping up NAFTA. He suggested “USMC,” in honor of the U.S. Marine Corps, but in the end, USMCA won out.

Winners and losers in the final USMCA deal

Big changes for cars. The goal of the new deal is to have more cars and truck parts made in North America. Soon, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.

There’s also a new rule that a significant percentage of the work done on the car must be completed by workers earning at least $16 an hour, or about three times what the typical Mexican autoworker makes. Starting soon, cars and trucks must have at least 30 percent of the work on the vehicle done by workers earning $16 an hour. That gradually moves up to 40 percent for cars by 2023.marks is what date the new provisions will take effect.

While many economists think these new rules will help some North American workers, they also warn that car prices might rise and that some small cars may end up being produced in Asia, not North America, because they would be too expensive under the USMCA.

Big changes for Mexican workers. The USMCA requires Mexico to change its laws to make it easier for workers to unionize. The Trump administration pushed hard for this because it should cause wages to rise in Mexico, making it less attractive for companies to move factories south of the U.S. border. The USMCA also stipulates that Mexican trucks that cross the U.S. border must meet higher safety regulations.

Democrats and U.S. labor unions insisted on tougher enforcement to ensure Mexico follows through on its commitments. There will be a formal committee to monitor Mexico on labor issues (as well as “labor attachés” based in Mexico), according to a fact sheet from Rep. Richard E. Neal (D-Mass.), chair of the House Ways and Means Committee. And there are clear benchmarks Mexico has to hit in the coming years — or face penalties. (We await details on what those punitive measures are).

Trump is reshaping U.S. trade policy, but not at the scale he long promised

Trump’s victory: Canada opens up its milk market to U.S. farmers. Trump tweeted often about how unfair he thought it was that Canada charged such high tariffs on U.S. dairy products. Canada has a complex milk and dairy system. To ensure Canadian dairy farmers don’t go bankrupt, the Canadian government restricts how much dairy can be produced in the country and how much foreign dairy can enter to keep milk prices high.

Under the USMCA, Canada is keeping most of its complex system in place, but U.S. farmers will be able to sell more “Class 7” dairy products to Canada, everything from milk powder to ice cream. The USMCA also allows more sales of U.S. eggs and turkeys to Canada.

The Trump vs. Obama economy — in 15 charts

Democrats cut sweeteners for pharma. The original USMCA text called for biologic drugs to get 10 years of intellectual property protection. (Canada currently does 8 years.) Democrats say the decade-long provision is gone now. Similarly, the original USMCA granted any pharmaceutical company three additional years of IP protection if it found a new use for an older drug.

Increased IP protections. The new IP chapter is over 60 pages and contains more stringent protections for patents and trademarks, including for biotech, financial services and even domain names. Many business leaders and legal experts believed these updates were necessary given that the original agreement was negotiated 25 years ago.

Increased environmental protections. The latest iteration of the environmental chapter is 30 pages long and makes a number of advancements, especially around protecting whales, fish and other marine wildlife from pollution and overfishing. In particular, Mexico agrees to enhance monitoring to stop illegal fishing, and all three countries agree to no longer subsidize fishing of overfished species. There’s also an enhanced customer verification to ensure only legally harvested goods are coming from Mexico.

Enhanced protections against currency manipulation. This is a big one for the Trump administration. The president tweets often about how other countries are devaluing their currencies so they can sell their goods cheaply on the global market (and undercut American products). The USMCA spells out that Canada and Mexico agree to “market-determined exchange rates” and that all three countries will get regular updates (typically monthly) on any government intervention in the currency markets. Canada and Mexico have generally been good about this already, but this is a clear signal to the Chinese of what Trump wants in other deals.

Mexico and Canada get an assurance that Trump won’t pound them with auto tariffs. Trump has repeatedly threatened to slap hefty tariffs on car and vehicle parts coming from overseas into the United States. Along with the new trade deal, his administration signed “side letters” allowing the two nations to mostly dodge Trump’s auto tariffs.

The side letters say Canada and Mexico can continue sending about the same vehicles and parts across the border free of charge, regardless of whether auto tariffs go into effect down the road. Only parts above that quota could face tariffs.

Deal must be reviewed after six years. The USMCA stipulates that the three nations will review the agreement after six years. If all parties agree it’s still good, then the deal will continue for the full 16-year period (with the ability to renew after that for another 16 years).

Canada’s victory: Chapter 19, allowing for a special dispute process, stays intact. Canadian Prime Minister Justin Trudeau said repeatedly that he wanted to keep NAFTA Chapter 19 in place, and that’s exactly what happened. The United States pushed hard to eliminate it, but in the end, it stayed.

Chapter 19 allows Canada, Mexico and the United States to challenge one another’s anti-dumping and countervailing duties in front of a panel of representatives from each country. This is generally a much easier process than trying to challenge a trade practice in a U.S. court. Over the years, Canada has successfully used Chapter 19 to challenge the United States on its softwood lumber restrictions.

Chapter 11, giving investors a special way to fight government decisions, is (mostly) gone. Chapter 11 is eliminated entirely for Canada and mostly for Mexico. Chapter 11 gave companies and investors a special process to resolve disputes with one of the governments in NAFTA. The idea was that if investors put a lot of money into a project and then the government changed the rules, there was a clear dispute process — outside the court system — where investors could get their problem resolved.

Critics argue that Chapter 11 was mainly used as a way for big corporations to get taxpayer money, but businesses say it was necessary to ensure they weren’t harmed by sudden changes when new governments came into power. In the end, Chapter 11 is mostly gone, except for a few key industries, such as oil, that lobbied hard to be able to challenge the Mexican government if it changes the rules and tries to nationalize its energy sector again.