Democratic-led House expected to give Trump big win on trade

One day after impeaching President Donald Trump, the Democratic-led House is expected to overwhelmingly pass one of his signature priorities, a rewrite of the 25-year-old free trade agreement he blames for shipping U.S. manufacturing jobs to Mexico.

A bill implementing terms of the United States-Mexico-Canada Agreement is expected to pass Thursday with bipartisan support after House Speaker Nancy Pelosi and her colleagues won key concessions from an administration anxious to pass the trade deal before next year’s election season makes that task more difficult. The agreement is projected to have only a modest impact on the economy. But it gives lawmakers from both parties the chance to support an agreement sought by farmers, ranchers and business owners anxious to move past the months of trade tensions that have complicated spending and hiring decisions.

Trump made tearing up the North American Free Trade Agreement a hallmark of his presidential run in 2016 as he tried to win over working-class voters in states such as Michigan, Ohio, Wisconsin and Pennsylvania. The vote offers evidence that he followed through. “We wouldn’t even be discussing USMCA if it were not for President Trump,” said Rep. Jason Smith, R-Mo. “You can’t debate that.”

It’s unclear how many Democrats will vote for the bill. Some say the agreement still doesn’t do enough to prevent U.S. jobs from relocating to Mexico, but it has won praise from Democrats who have routinely voted against prior trade agreements. “I’ll probably get some flak from some of my friends back in Chicago,” said Rep. Danny Davis, D-Ill. “But I’m going to vote for this agreement because I believe that it moves us forward.”

The House Ways and Means Committee advanced the bill by voice vote Tuesday. If the House passes it as expected, the Senate will likely take it up when its members return from the holidays and after dealing with impeachment. The original NAFTA phased out nearly all tariffs on goods produced and traded within North America. It was extraordinary because it linked two wealthy, developed countries with a poor, developing country. Since then, trade with Canada and Mexico has increased more rapidly than trade with most other countries.

Democrats for years have charged that NAFTA led to massive losses of high-paying manufacturing jobs in the U.S. as companies moved production to low-wage Mexico. Trump distinguished himself from free-trade Republicans in the presidential primary with his NAFTA-bashing rhetoric, and his administration got Canada and Mexico to negotiate a rewrite. The International Trade Commission projected in April that the USMCA would boost the economy by $68 billion and add 176,000 jobs six years after taking effect.

Some of the biggest impacts would be felt in the U.S. automotive industry. The agreement aims to see more cars produced where workers earn an average of at least $16 an hour. The commission found that the new agreement would create 30,000 jobs in American auto parts plants. On the downside, the commission found the pact would increase the cost of pickup trucks and cars. That would hurt demand and reduce the number of jobs in factories that assemble cars by about 1,500.

Business and farm groups had been hitting the airwaves and the halls of Congress to get lawmakers to support the pact, putting pressure on Democrats to work with the administration even as labour unions remained wary that the new deal represented much of an improvement from NAFTA. Trump, at times, seemed resigned to the assessment that the two sides would never reach a compromise. “She’s incapable of moving it,” Trump asserted of Pelosi just a few weeks ago.

But behind the scenes, Trump’s point person on trade, U.S. Trade Representative Robert Lighthizer, was working with House Democrats on changes to address their concerns. The agreement includes a process that could lead to inspections of factories and facilities in Mexico that are not living up to labour obligations. It secures more than $600 million for environmental problems in the NAFTA region. It also scrapped giving pharmaceutical companies 10 years’ protection from cheaper competition in a category of ultra-expensive drugs called biologics, which are used to fight such illnesses as cancer, rheumatoid arthritis and diabetes.

In the end, the AFL-CIO endorsed the pact, as have the U.S. Chamber of Commerce and other major business groups. Trump can show he was able to follow through on a signature campaign issue while Democrats can say they were able to pursue impeachment while passing major legislation. Some Republicans are grumbling that Democrats took too long to get USMCA across the finish line, but many are quite happy with the result. Rep. Mike Kelly, R-Pa., said the pact reminded him of when he would write a letter to Santa, and it would be answered with most of the presents he wanted on Christmas morning.