Speaker of the House Nancy Pelosi speaks Tuesday about the agreement to replace the North American … [+]
Pardon me for being a cynic.
House Speaker Nancy Pelosi’s willingness to push the new NAFTA, the USMCA, through the House of Representatives now is little more than a calculated move on the political chessboard.
Sure, she had to get the AFL-CIO and some recalcitrant Democrats on board. And sure this agreement is a better agreement for what, before the Trump era, had been traditional Democractic Party concerns. If you have any doubts about that, consider which party in Congress was celebrating and which was relatively quiet.
But it was also intended to do two things:
First, neutralize President Trump’s repeated barbs about the do-nothing Democrats as the election season kicks into high gear. The risk? It allows President Trump his own campaign fodder, since replacing the North American Free Trade Agreement was one of his campaign themes.
Second, given the surreal timing of the announcement, it was intended to present Democrats as reasonable, as willing to work across the aisle — at the same time as the House of Representatives announced two articles of impeachment against the president after contentious hearings.
Pardon me for being a pragmatist. If it gets the job done, I’m OK with the gamesmanship.Who won? We win.
While the United States trades with more than 200 countries, while trade with 99 of them topped $1 billion last year, trade with just two of them, the top two, with Canada and Mexico, accounts for 30 percent of the more than $4 trillion in annual U.S. trade, now that China has been pushed to the curb.
Getting USMCA across the finish line matters. And while it’s not there yet, while all three countries’ legislatures need to approve the document as altered from when all three sides agreed a year ago, it should pass easily.
While there would be nothing wrong with keeping NAFTA and simply walking away from the United States Mexico Canada Agreement, the possibility that Trump might actually withdraw from NAFTA if USMCA weren’t passed gave the trade community, the manufacturing sector and the agricultural sector the willies.
Oh, and I am an equal-opportunity cynic, in case you’re concerned.
President Trump’s desire to forge an entirely new free trade agreement (one that conveniently dropped the words “free” or “trade” from the name, incidentally) was little more than an attempt to put his name on something, metaphorically speaking.
We never needed a new agreement.
Of course, the president was right that, nearly a quarter century after the North America Free Trade Agreement’s passage, it needed to be dusted off and updated.
But, in the eyes of many experts, the United States Mexico Canada Agreement is a marginal improvement, as you can see here, here, here and here.
Sure, there is some tinkering to automotive rules in the continent’s most important export-import industry, involving both parts and labor.
Yes, there’s a relatively innocuous if slightly objectionable “sunset clause.”
Yes, America’s dairy farmers cracked open Canada’s dairy market slightly.
Yes, there are new provisions for e-commerce, which dawned at about the same time as NAFTA but whose ramifications weren’t clearly felt for years.
Yes, there were some protections for the pharmaceutical industry diminished, which would in theory offer an advantage of the consumer.
But, my goodness, that was a lot of work, and a lot of threats, for limited gains.
Considering that Trump called NAFTA the worst agreement ever — including again Tuesday — certainly USMCA can be little better than the second-worst ever.
Trump as we all know by now, may be president of the United States but he is almost certainly the King of Hyperbole. We have learned how to translate what he says.
“It will be the best and most important trade deal ever made by the USA,” Trump said on Tuesday. “ Importantly, we will finally end our country’s worst trade deal, NAFTA.”
But it wasn’t, of course, and this isn’t, of course.
NAFTA remains, for the moment, in place and a tremendous success. USMCA, assuming it gains final passage, can continue that success.
The USMCA has the opportunity to continue to bind together three neighbors in an agreement that helps improve the lives of people across all three continents, if unevenly and if imperfectly.
More choice, lower prices, more stability, more opportunity for new jobs in our growing service economy for those ready to move beyond jobs in labor which are giving way first to automation and then, to a lesser extent, jobs across the border.
No guarantees of a better life for everyone. No guarantees that everyone will be a winner. Just a guarantee that the net effect will be, as with NAFTA, entirely positive.
Call me an optimist.
