Tag Archives: North American Trade Agreement

Trump signs USMCA, ‘ending the NAFTA nightmare’; key Democrats not invited

By Jeff Mason and Andrea Shalal

WASHINGTON (Reuters) – President Donald Trump on Wednesday signed a new North American trade agreement during an outdoor ceremony at the White House attended by about 400 guests – but not the key Democrats who helped secure congressional passage of the deal.

Trump, on trial in the U.S. Senate on charges of abusing power and obstructing Congress, welcomed Republican senators at the South Lawn event by name. Other guests included lawmakers from around the country, workers, farmers and chief executives, as well as officials from Mexico and Canada, the White House said.

The U.S.-Mexico-Canada Agreement (USMCA) will replace the 26-year-old North American Free Trade Agreement, including tougher rules on labor and automotive content but leaving $1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged.

“Today, we are finally ending the NAFTA nightmare and signing into law the brand-new U.S.-Mexico-Canada Agreement,” Trump told the crowd. Flanked by a group of American workers wearing hard hats, Trump said the agreement would bolster U.S. economic growth, benefiting farmers, workers and manufacturers.

He said his concerns about NAFTA-triggered outsourcing had triggered his run for the presidency in 2016.

A wide array of business groups welcomed the agreement, which must still be ratified by Canada’s parliament before it can take effect. Mexico has already approved the deal.

Canadian Prime Minister Justin Trudeau, speaking in Ottawa, said his minority government would continue to answer questions posed by various industries and other groups.

“We have questions and we have a process for ratification. I just look forward to getting, getting through it responsibly and rapidly because it’s so important for Canadians,” he said.

NO DEMOCRATS

Excluded from the event were House of Representatives Speaker Nancy Pelosi, House Ways and Means Committee Chairman Richard Neal and other Democrats who negotiated with the Trump administration for months to expand the pact’s labor, environmental and enforcement provisions and pave the way for its approval by the Democratic-controlled House.

Trump did not mention the work done by Pelosi or other Democrats on the trade pact, but U.S. Trade Representative Robert Lighthizer, in his remarks at the ceremony, acknowledged the role that House leaders played in getting the deal done.

The event came as U.S. senators will start to pose questions in Trump’s impeachment trial and ahead of a key vote later this week on whether to allow the calling of witnesses like former national security adviser John Bolton.

Trump lashed out against Bolton on Twitter on Wednesday after Bolton wrote in an unpublished book manuscript that the president told him he wanted to freeze $391 million in security aid to Ukraine until Kiev pursued investigations of Democrats, including former Vice President Joe Biden, a top contender for the Democratic nomination to face Trump in this year’s election.

Pelosi told reporters that Democrats had ensured “vast improvements” to the USMCA before it was approved, despite their absence from Trump’s White House event, adding, “I hope he understands what he’s signing today.”

Neal told reporters some Republican senators thought the deal was “too Democratic.” He said the final accord won stronger protections for workers, better enforcement of environmental provisions and steps to prevent higher drug prices.

Representative Rosa DeLauro told reporters in a separate teleconference that Democrats would remain vigilant on oversight of the improved trade deal and would fight for even better climate protections in future trade deals.

The U.S. Senate this month overwhelmingly approved legislation to implement the USMCA, sending the measure to Trump for signing into law.

U.S. lawmakers said it was unclear when the accord would take effect, since Canada’s main opposition Conservative Party had expressed concerns about aspects of the deal and there was no exact timeline for ratification there.

Even after Canada ratifies the accord, implementation could take several more months since the three countries must show they are meeting their obligations before the clock starts ticking on an effective date.

(Reporting by Andrea Shalal and Jeff Mason; Additional reporting by Susan Heavey, David Shepardson and Alexandra Alper in Washington, and David Ljunggren in Ottawa; Editing by Clarence Fernandez, Dan Grebler and Jonathan Oatis)

U.S. House passes new North American trade deal replacing NAFTA

By David Lawder

WASHINGTON (Reuters) – The U.S. House of Representatives overwhelmingly approved a new North American trade deal on Thursday that includes tougher labor and automotive content rules but leaves $1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged.

The House passed legislation to implement the U.S.-Mexico Canada Agreement 385-41, with 38 Democrats, two Republicans and one independent member voting no.

The bipartisan vote contrasted sharply with Wednesday night’s Democrat-only vote to impeach U.S. President Donald Trump. [nL1N28S09W]

The House vote sends the measure to the Senate, but it is unclear when the Republican-controlled chamber will take it up. Senate Republican leader Mitch McConnell has said that consideration of the measure would likely follow an impeachment trial in the Senate, expected in January.

The USMCA trade pact, first agreed upon in September 2018, will replace the 1994 North American Free Trade Agreement. Trump vowed for years to quit or renegotiate NAFTA, which he blames for the loss of millions of U.S. factory jobs to low-wage Mexico.

House Speaker Nancy Pelosi gave USMCA a green light last week after striking a deal with the Trump administration, Canada and Mexico to strengthen labor enforcement provisions and eliminate some drug patent protections.

Pelosi said she was not concerned about Democrats handing Trump a political victory on USMCA as they are trying to remove him from office.

“It would be a collateral benefit if we can come together to support America’s working families, and if the president wants to take credit, so be it,” Pelosi said during House floor debate before the vote.

CONCESSIONS FOR DEMOCRATS

The changes negotiated by Democrats, which include tighter environmental rules, will also set up a mechanism to quickly investigate labor rights abuses at Mexican factories. They have earned the support of several U.S. labor unions that have opposed NAFTA for decades.

U.S. Trade Representative Robert Lighthizer made a concession by dropping a requirement for 10 years of data exclusivity for biologic drugs, a provision that Democrats feared would keep drug prices high and that they called a “giveaway” to big drugmakers.

Some of the most ardent trade skeptics in Congress have voiced support of the deal, including Representative Debbie Dingell, who represents an autoworker-heavy district in southeastern Michigan. Dingell said in television interviews that she backed the bill, even though she was skeptical it would bring auto jobs back to Michigan.

Representative Ron Kind, a pro-trade Democrat from Wisconsin, one of the top dairy-producing states, praised new access to Canada’s closed dairy market under USMCA.

“A no vote is a return to the failed policy of the old NAFTA, the status quo, rather than this more modernized version,” Kind said in floor debate.

AUTOS, DIGITAL, CURRENCY

The agreement modernizes NAFTA, adding language that preserves the U.S. model for internet, digital services and e-commerce development, industries that did not exist when NAFTA was negotiated in the early 1990s. It eliminates some food safety barriers to U.S. farm products and contains language prohibiting currency manipulation for the first time in a trade agreement.

But the biggest changes require increased North American content in cars and trucks built in the region, to 75% from 62.5% in NAFTA, with new mandates to use North American steel and aluminum.

In addition, 40% to 45% of vehicle content must come from high-wage areas paying more than $16 an hour – namely the United States and Canada. Some vehicles assembled in Mexico mainly with components from Mexico and outside the region may not qualify for U.S. tariff-free access.

The U.S. Congressional Budget Office estimated earlier this week that automakers will pay nearly $3 billion more in tariffs over the next decade for cars and parts that will not meet the higher regional content rules.

(Reporting by David Lawder in Washington; Additional reporting by Andrea Shalal in Washington and David Ljunggren in Ottawa; Editing by Matthew Lewis and Leslie Adler)

U.S., Canada, Mexico sign trade deal after last-minute brinkmanship

U.S. President Donald Trump, Canada's Prime Minister Justin Trudeau and Mexico's President Enrique Pena Nieto attend the USMCA signing ceremony before the G20 leaders summit in Buenos Aires, Argentina November 30, 2018. REUTERS/Kevin Lamarque

By Roberta Rampton

BUENOS AIRES (Reuters) – The leaders of Mexico, Canada and the United States signed a North American trade pact on Friday after brinkmanship over the final details of the deal continued through the eve of the signing.

They agreed on a deal in principle to govern the more than trillion dollars of mutual trade after a year and a half of acrimonious negotiations concluded with a late-night bargain just an hour before a deadline on Sept. 30.

Since then, the three sides have bickered over the wording and the finer points of the deal and still had not agreed just hours before officials were due to sit down and sign it as the G20 summit kicks off in Buenos Aires.

Legislators from the three countries still have to approve the pact, officially known as the United States-Mexico-Canada Agreement (USMCA), before it goes into effect and replaces the North American Free Trade Agreement (NAFTA).

Canadian Prime Minister Justin Trudeau’s spokesman only confirmed his attendance late on Thursday. Before signing the deal he continued to refer to as “the New NAFTA,” Trudeau told Trump the two should continue to work together to eliminate steel and aluminum tariffs.

Mexico’s President Enrique Pena Nieto joined the ceremony on his last day in office.

Trump had vowed to revamp NAFTA during his 2016 presidential election campaign. He threatened to tear it up and withdraw the U.S. completely at times during the negotiation, which would have left trade between the three neighbors in disarray.

Trump forced Canada and Mexico to renegotiate the 24-year-old agreement because he said the existing pact encouraged U.S. companies to move jobs to low-wage Mexico.

U.S. objections to Canada’s protected internal market for dairy products was a major challenge facing negotiators during the talks, and Trump repeatedly demanded concessions and accused Canada of hurting U.S. farmers.

A side letter to the September agreement showed that Trump preserved the ability to impose threatened 25 percent global tariffs on autos while largely exempting passenger vehicles, pickup trucks and auto parts from Canada and Mexico.

(Reporting by Roberta Rampton and Caroline Stauffer in Buenos Aires and David Ljunggren in Ottawa; Editing by Lisa Shumaker and Chizu Nomiyama)

Mexico swinging against the establishment as presidential campaign starts

FILE PHOTO: Mexico's President Enrique Pena Nieto is pictured during the 80th anniversary of the expropriation of Mexico's oil industry in Mexico City, Mexico March 16, 2018. REUTERS/Edgard Garrido

By Frank Jack Daniel

MEXICO CITY (Reuters) – Mexicans tired of graft and chaotic violence look set to reject the party that has governed the country for most of the past century, embracing a global anti-establishment mood by favoring a leftist dissenter in a presidential election.

Campaigning formally starts on Friday for the July 1 election and major opinion polls show Andres Manuel Lopez Obrador with a large lead, with the mainstream opposition challenger second and the ruling party candidate far behind.

Mexico suffered its worst murder toll on record last year as organized crime ran rampant smuggling drugs, fuel and people, while corruption scandals battered the credibility of President Enrique Pena Nieto’s Institutional Revolutionary Party (PRI).

Those issues rather than the economy are topping Mexicans’ concerns going into the campaign, but the outcome could mark a shift away from decades of gradual economic liberalization.

While Lopez Obrador now embraces the North American Free Trade Agreement and has softened his opposition to existing private investment in the energy sector, he has flagged a more cautious approach to further opening up the economy.

His popularity has been fanned by U.S. President Donald Trump’s tough policies on trade and immigration and insults that have angered Mexicans. His government could seek to row back bilateral cooperation that has gathered pace under Pena Nieto.

“The people want a change, that’s why our adversaries are getting really nervous,” Lopez Obrador said last week.

The centrist PRI has ruled Mexico continuously since 1929, except for a 12-year break when Vicente Fox and his successor led the National Action Party (PAN) to power in 2000 and 2006.

Both the PAN and the PRI favored opening the economy to more foreign investment and close ties with the United States.

DEEP-ROOTED CORRUPTION

Variously described as a left-winger, a populist and a nationalist, Lopez Obrador quit the PRI in the 1980s and his subsequent political career included a stint as mayor of Mexico City, one of the world’s largest metropolises. He has been in permanent opposition since first running for president in 2006.

He says only he can clean up deep-rooted corruption in the traditional parties. At the same time, he promises to change the constitution if he wins to end immunity for sitting presidents and hold regular referendums on key issues, including one every two years on whether he should continue his six-year term.

“We Mexicans are now seeing there are definitely two alternatives before us,” Tatiana Clouthier, a senior member of the Lopez Obrador campaign said on Thursday: more of the same, or a government that will spread the wealth more widely.

In second place is former PAN chief Ricardo Anaya, whose coalition includes center-left parties once allied to Lopez Obrador. He has pitched himself as a modern alternative to the unpopular PRI and to Lopez Obrador’s personalized leadership.

For many voters, July 1 will be about rejecting either the corruption of the ruling party, or Lopez Obrador, said Ernesto Ruffo, a PAN senator who in 1989 became the first politician to wrest control of a state government from the PRI.

“This is an election not for, but against,” he said.

Only Anaya, said Ruffo, offered a vision of the future.

The campaign of PRI candidate Jose Antonio Meade, who is not a member of the PRI, admits political parties are deeply mistrusted but says Meade is best placed to capture the mood.

Meade says Lopez Obrador’s jabs at the private sector, much of which the 64-year-old has excoriated as corrupt, will damage investment sentiment.

“When there’s investment there are jobs,” Meade told Mexican radio on Thursday. “When there are jobs we fight poverty.”

(Additional reporting by Dave Graham; Editing by Dave Graham and Paul Tait)