Donald Trump, House Democrats strike deal on revised trade pact with Mexico, Canada

  • In Business
  • 2019-12-10 16:03:01Z

WASHINGTON - House Democrats and President Donald Trump have struck an agreement to revise a new trade deal with Mexico and Canada, delivering a win for the president on a top legislative priority.

House Speaker Nancy Pelosi, D-Calif. announced the agreement at a news conference Tuesday morning, calling the revised trade pact "a victory for America's workers." She did not say when the House would vote on the revised agreement but suggested it could happen before the end of the year.

Top trade officials from the United States, Mexico and Canada are expected to meet in Mexico City for an afternoon ceremony, according to government schedules.

Pelosi and other Democrats said the revised agreement includes stronger provisions on labor, enforcement and pharmaceuticals that they had sought as condition for putting the United States-Mexico-Canada Agreement, or USMCA, to a vote in Congress.

Pelosi described the revised deal as "infinitely better" than the proposed agreement the Trump administration sent to Congress.

The Trump administration has been pushing for Congress to ratify the trade agreement before the end of the year. The revisions could clear the way for congressional approval of the deal even as House Democrats prepare to move forward with impeachment proceedings against Trump.

Shortly before Pelosi's news conference, Trump took to Twitter and said the deal had "very good Democrat support."

"That would be great for our Country!" he wrote.

A new trade agreement, announced 15 months ago after months of negotiations, will replace the North American Free Trade Agreement, or NAFTA, a nearly quarter-century-old accord that essentially eliminated tariffs on most goods traded among the three countries.

Trump blamed NAFTA for the loss of American jobs and frequently slammed it as the "worst trade deal ever" and during the 2016 presidential campaign. After taking office, his administration opened talks with Mexico and Canada to rewrite the agreement.

The new trade pact includes rules for the movement of products between the three countries. Among the new provisions are a requirement that a higher percentage of autos be made from parts manufactured in North America.

Under NAFTA, automakers qualify for zero tariffs if 62.5 percent of their vehicles' components are manufactured in the U.S., Canada or Mexico. That figure would jump to 75 percent under the new deal. Starting in 2020, 30 percent of vehicle production also would have to be done by workers earning an average production wage of at least $16 per hour. By 2023, that percentage would rise to 40 percent.

The agreement would run for 16 years but would be reviewed after six years and could be extended for another 16.

Trump and the leaders of Mexico and Canada signed the deal late last year, but Congress has yet to approve the agreement. Trump has blamed House Speaker Nancy Pelosi for the delay, arguing she was holding it up under orders from labor unions.

More: What is NAFTA? Seven things to know about the North American free trade pact

The new trade agreement included some policies embraced by Democrats, including stronger labor standards and environmental provisions. Yet labor groups and other critics complained those provisions didn't go far enough and that the new agreement did not include sufficient mechanisms to enforce the new requirements.

When House Democrats regained the majority in January, Pelosi and other Democratic leaders began negotiations with the Trump administration to revise the trade pact to address those concerns.

Rep. Jan Schakowsky, D-Ill., who was involved in the trade talks, said the revised deal eliminates a pharmaceutical provision that protected manufacturers of expensive brand-name drugs from generic copies of their medicines.

Under U.S. law, pharmaceutical makers are given 12 years of market protection for their drugs, which essentially provides them with a limited monopoly against competition from manufacturers of generic medicines. Canada grants drugmakers eight years of market protection, and Mexico provides five.

The trade proposal offered by the Trump administration would have provided drugmakers with a minimum of 10 years of market exclusivity, which means generic copies of those drugs could not have hit the shelves for at least a decade. That would have meant a longer wait time for residents of Canada and Mexico before generic copies of drugs will be available.

Schakowsky said that provision has been stricken under the agreement with Democrats. "It is gone," she said.

Richard Trumka, president of the AFL-CIO, endorsed the revised trade agreement. While the deal is "far from perfect," he said, "there is no denying that the trade rules in America will now be fairer because of our hard work and perseverance."

Some Republicans have questioned whether negotiators over-compensated on revamping the agreement in order to get Democratic votes.

One of them, Sen. John Cornyn, R-Tex., declined to endorse the revised version, saying he needed to look at the details.

"I look forward to reviewing the agreement, hearing how it will impact Texas and providing feedback," Cornyn said.

Mexico's Senate already has ratified the agreement, but Canada has been waiting for the U.S. Congress to act before it approves the pact.

More: Trade deal with Canada, Mexico could delay arrival of cheaper generic drugs, critics warn

This article originally appeared on USA TODAY: Trade: Donald Trump, House Democrats announce deal on USMCA


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