THE TTALK QUOTES 

On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-463-5074
 
No. 50 of 2019
SATURDAY, JULY 20, 2019

Click HERE for Wednesday's trade quote
from President Trump.
 
USMCA: THE FLIP SIDE OF "NO"
   
 "A vote against USMCA is a vote for the status quo [for NAFTA].

Sen. Rob Portman
July 16, 2019
CONTEXT
Senator Rob Portman, a Republican from Ohio and a former U.S. Trade Representative, took to the floor of the Senate this past Tuesday to talk about USMCA, the United States-Mexico-Canada Agreement. He didn’t just touch on the irony surrounding the politics of this agreement, he expounded on it. That irony lies in the fact that so many Democrats have argued against NAFTA for so long, urging corrections like many of those in the USMCA. And yet there are many Democrats who seem poised to vote against USMCA. If they do, they will, in effect, be voting for NAFTA. 

As one would have expected, Senator Portman went through what by now should be a familiar list of the benefits to be expected from replacing NAFTA with USMCA. They include the provisions relating to the digital economy, expanded market access for certain products, a projected 176,000 new jobs, and the crucial reminder that, taken together, Canada and Mexico are by far America’s largest export market. 

For today’s entry, however, we are going to focus on the parts of Senator Portman’s presentation that explained his contention that a vote against USMCA would be a vote for NAFTA, including his comments on labor and environment. 

Regarding those latter two issues, Senator Portman said:
“…Labor and environmental standards. Not only are the standards stronger [under USMCA], but they’re enforceable under this agreement. They are not enforceable under NAFTA.”

The labor issue is of course more than just Mexico’s labor laws, though they are certainly part of the picture. There is also, for example, the USMCA requirement that “40 to 45 percent of a USMCA vehicle made in Mexico or anywhere in North America must be produced by workers making at least $16 an hour.” That was an issue Senator Portman discussed at some length.

Regarding the aforementioned irony, he said:

“I must tell you I am surprised, even amazed to see so many of my Democratic colleagues not stand up to support this agreement, because it has all these things that they said that they have wanted over the years, and they certainly don’t like NAFTA. 

“Many of them have campaigned against NAFTA for the past 25 years. In a way, if you vote against USMCA, you know what you’re stuck with -- NAFTA. So in a way you’re voting for NAFTA if you vote against USMCA.”

COMMENT
In our last entry, we noted that President Trump is clearly keeping alive the possibility, the threat, that he might withdraw from NAFTA if USMCA is not approved. Our judgment of the political landscape is that Senator Portman’s argument is the more cogent, but it too has its shortcomings. Our view – which we believe is widely shared – is that USMCA would pass if it came to the floor in either the House or the Senate. The question is whether the Democratic leadership in the House will allow a vote. If they do not, that too would logically be an affirmative “vote” for NAFTA over USMCA. 

USMCA and North American Business will be the topic at GBD’s next event. This will open with remarks from Rep. Henry Cuellar of Texas and will include of panel of business representatives from all three North American countries. 

Click the title link above for full details, including speakers and registration options. 
SOURCES & LINKS
An Odd Vote For NAFTA takes you to the press release with Senator Portman’s floor statement on USCMA from July 16. This was the source for today’s featured quote.

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