The U.S. Trade Representative, Ambassador
Robert E. Lighthizer,
spent last Wednesday, June 17, on Capitol Hill, testifying on the President’s trade policy. In the morning, he fielded questions from the House Ways and Means Committee and in the afternoon he did the same at the Senate Finance Committee. We have taken only a few sips from that well of critical dialogue, but we are likely to return to it often.
The successor agreement to NAFTA, the U.S.-Mexico-Canada Agreement, USMCA, featured prominently in both hearings. To recap briefly, NAFTA entered into force on January 1, 1994, after propelling
Ross Perot
, an opponent, to the best showing of any third-party candidate since
Theodore Roosevelt
and his Bull Moose Party in 1912. In the 2016 campaign and since,
President Trump
frequently referred to NAFTA as the “the worst trade deal ever made,” and in office he sought to replace with it with a new, successor agreement. That became USMCA, which was signed by the leaders of the United States, Canada, and Mexico on November 30, 2018, and ratified by the U.S. Congress this past January. The big question had always been whether the House would approve it, which they did on December 19, 2019. The vote was 385 to 41. Now USMCA is scheduled to enter into force a week from tomorrow, on July 1, 2020.
As today’s featured quote suggests, the enforcement provisions of the agreement are destined to be tested sooner rather than later.
Rep. Richard Neal
(D-MA), the chairman of the Ways and Means Committee, talked about the labor provisions of the agreement in his opening statement – especially the commitments made by Mexico – and pressed the Ambassador on what USTR has done and will do to ensure those commitments are honored. The question that gave rise to today’s quote, however, came from the Ranking Member of the Committee,
Rep. Kevin Brady
(R-TX), who asked:
How do you intend to use entry into force [of] dispute settlement to ensure that we hold USMCA partners accountable and that they meet their obligations?
The two areas of enforcement that seemed to concern the Committee most are Mexico’s commitments on labor and labor rights and Canada’s pledge to allow increased access for U.S. dairy products. Mr. Brady also highlighted barriers to U.S. biotech products in Mexico. Each of these merits its own essay. Here we shall simply take note of USTR’s approaches or attitudes towards them. To begin, this was how Ambassador Lighthizer responded to Ranking Member Brady:
First of all, there are specific obligations, a whole host of them, that were written and agreed to by all – by most members, 90 percent of the members of the Congress – in USMCA, and there are a number of things that we’re looking at that are quite troubling.
One of the reasons that I wanted to get this into effect on July 1 was so that we could start enforcing it.
There were people that thought we should let it slide for one reason or another. Some COVID related, some others. My sense was we don’t have any ability to enforce anything until we get it. The reality is that NAFTA didn’t really have much by way of enforcement, didn’t have specificity.
Biotech.
On this topic, Ambassador Lighthizer added:
That is a major, major problem. The reality is that Mexico has not approved any biotech products in the last almost two years. Our view is that’s not right.
Labor and Labor Rights in Mexico.
Our impression is that this is the single largest and most important issue for House Ways and Means members because of its importance and because it is the area where the Committee clearly put its mark on the agreement. In discussing the labor issues with Chairman Neal, Ambassador Lighthizer acknowledged that these will be difficult issues but assured him that “When it [USMCA] goes into effect,
we will take action early and often when there are problems … The Administration will follow through.”
Canada’s Dairy Concessions
. As an article from McLean’s back in 2018 explained:
Dairy was Trump’s biggest gripe with Canadian trade, and the Dairy Farmers of Canada depicted it as Trudeau’s biggest concession.
As to whether Canada will follow-through on these commitments, Ambassador Lighthizer expressed a somewhat nuanced confidence that they would. “
The Canadian government has been very good about living up to the spirit of the agreement,
” he said, but this is a complex area. As he put it, “
There are ways that they could implement their program that would be less helpful to us than others.”
In any event, he pledged that USTR will monitor the situation closely, and that, “If we need to, we will bring an action against them.”
