Congressional Rejection of USMCA Would Destroy Trade Agenda, Lighthizer Says
Although the main topic of the hearing was China, U.S. Trade Representative Robert Lighthizer told House Ways and Means Committee members repeatedly Feb. 27 that if they don't ratify the U.S.-Mexico-Canada Agreement, there will be no trade agenda for the next several years. "If we don’t pass USMCA, it says we don’t have a consensus," he said. Lighthizer also said: "It’s clearly better than its predecessor, it’s no question. Millions and millions of people are affected [by NAFTA]. You just have to pass it."
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When International Trade Today asked Ways and Means Chairman Richard Neal, D-Mass., what he thought of Lighthizer's comments on the topic, he said, "He's essentially saying that you can vote for a new and what he would describe as an improved NAFTA, you could go back to the status quo, which everybody agrees has to be revised, or you could also acknowledge the threat that the president has offered -- that is, you don't do the new and improved one, you end up coming out of NAFTA. I think what he is saying is that there are three options, two of which don't seem to be very plausible." Neal voted against the original NAFTA.
Neal did not endorse some Democrats' assertion that the three NAFTA countries must return to the negotiating table. Some have said the biologics provision must be stripped out; others have said the new NAFTA's weaknesses on environment or labor cannot be solved through side letters or implementation legislation.
"It's going to be an ample opportunity here -- once the agreement is sent to us -- for conversation," Neal said, when asked about the argument that it should be reopened. But he also said he is encouraging committee members to embrace this idea: "once something is agreed to, you can't keep saying you're going to go back and revisit it. After something is agreed to, obviously if something happens that you did not anticipate, I think that's fair game, but if you say that this is the agreement, and you keep going back and back and back, then really that's not the agreement."
Requests for changes aren't just coming from the left. Rep. Drew Ferguson, R-Ga., told Lighthizer that he's concerned that three to five years is not enough time for automakers -- his district has a large Kia plant -- to adjust to the tighter auto rules of origin.
Lighthizer told him that manufacturers agree that the timeline is doable. To postpone it, he told Ferguson, would be delaying the creation of new American jobs. "We want them to manufacture more transmissions and more engines in Georgia, and they’ll quit using the Korean engines and transmissions," he said. "I’ve already pushed it out as far as I’m going to push it out."
Lighthizer was asked when the steel and aluminum tariffs on Canada and Mexico will be lifted -- they are widely seen as impediments to ratification. "We want to very much to work out a deal," he said. "Whether or not we’ll succeed I don’t know." When Rep. Steven Horsford, D-Nev., complained that metals tariffs are making all of Las Vegas' construction projects more expensive, Lighthizer replied, "I want to get a steel agreement, the president wants me to get an agreement with Canada and Mexico, and if I can, I think that will mitigate some of that."
Neal described Lighthizer's responses as "less than specific," and said that in his view, still having to work on Section 232 tariffs doesn't strike him as reaching the final deal.