Democrats could control trade deal’s fate

“We are many, many months from having these answers,” Sen. Ron Wyden (D-Ore.) said of the prospects of a vote for the USMCA trade deal coming anytime soon. | John Shinkle/POLITICO

Trade

Congress’ vote on Mexico-Canada pact unlikely this year

Congress is unlikely to have the time or political will to approve a new U.S.-Mexico-Canada trade agreement by the end of the year — increasing the chances that President Donald Trump will need to bring Democrats on board if he wants to put in place his replacement for NAFTA.

Congressional staff members from both parties say there’s little desire to finish the job before the next session of Congress begins in January.

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“It’s premature to start talking about voting on an agreement before the Congress and the American people even understand the deal’s broad economic effects, or what it means for jobs in the United States,” said Sen. Ron Wyden, ranking member of the Senate Finance Committee. “We are many, many months from having these answers.”

Republicans would either have to negotiate an almost insurmountable series of procedural steps to get an up or down vote with a simple majority in the Senate on the deal this year, or they would have to open up the pact to amendments and get at least 60 senators on board.

Democrats want to hold the vote next year because they’re hoping they’ll have control of at least one chamber of Congress after the midterm elections in November.

“In order to do it, you would have to throw a whole bunch of procedure out of the window and expose yourself politically,” said Bill Reinsch, a trade expert at the Center for Strategic and International Studies.

That means the fate of the new pact may rest on whether it appeals to the left. Though U.S. Trade Representative Robert Lighthizer has expressed confidence that the final pact will earn widespread support, there is still healthy skepticism over whether Democrats will support one of Trump’s key policy goals. And there are still questions from Democrats and their labor union backers about how some new provisions would be enforced, particularly when it comes to pushing Mexico to improve worker rights and wages.

Even Trump doesn’t know how things will go if Democrats win control the House.

“I can[‘t] tell you whether or not they will obstruct, whether or not they will resist,” the president said in remarks last week announcing the final trade deal. “I mean, their whole campaign is, ‘Resist.’ I see their signs all over: ‘Resist.’ They don’t even know what they’re resisting.”

Trying to push the deal through in 2018 — and therefore straying from a process established under Trade Promotion Authority or “fast track” legislation — probably doesn’t rank high on the administration’s agenda, according to sources in Congress and close to Lighthizer.

“To be fair, every indication we’ve gotten from USTR has been that they would be looking at a vote in 2019. I think they’d like to do it early in 2019, but 2019,” said a senior Democratic congressional aide.

Lighthizer has made a point of following the fast-track process that gives the executive branch authority to make deals on behalf of Congress. Under that law, lawmakers agree to an expedited process for approving a pact with a simple majority in an up or down vote and no amendments, a process the administration will want to use for any future deals.

Lighthizer was back on Capitol Hill on Wednesday, fulfilling another of the law’s requirements to consult with lawmakers about the administration’s plans to strike new agreements with Japan, the United Kingdom, the Philippines and the European Union.

TPA offers the most assured path to approval, even though a deal must overcome several onerous steps before it can be voted on. Without it, the Senate would have a hard time getting the 60-vote majority to pass a deal. And even if Republicans wanted to push a vote by the end of the year under the expedited process, it’s unclear whether they would be able to speed up all of the steps to get it to the floor of both chambers in time.

“All the ducks would have to be lined up in a really straight line and ready to go, and we do not yet really see that,” said another congressional aide close to the process.

Senate Finance Chairman Orrin Hatch also does not seem to have interest in circumventing the fast-track timeline.

“I am working closely with Finance Committee members to review the details of the agreement to ensure that it meets the high standards of Trade Promotion Authority (TPA), and look forward to continuing consultations with the Trump administration,” Hatch said in a statement Thursday.

The Trump administration already got in just under the wire on one deadline when it reached a late-night deal with Canada at the very end of September. That allowed for the agreement text to be released for the required 60 days before it is signed at the end of November. The administration has pushed for a signing by that date to allow for departing Mexican President Enrique Peña Nieto to clear it before his last full day in office on Nov. 30.

Even now, the text of the agreement is not actually final and is still being reviewed by the three countries through what’s known as a “legal scrubbing” process.

Another key step requires the final text to be submitted to Congress 30 days before the introduction of the bill that would implement the changes to laws and regulations required by the new agreement.

If Congress wants to introduce the legislation the day after the formal signing, then the scrubbing process, which can normally take months, would have to conclude by the end of October. That would require the administration to submit final text by Nov. 1 to allow for the bill to be introduced Dec. 1.

If the submission deadlines weren’t complex enough, the TPA legislation requires the agreement to undergo a full economic analysis by the U.S. International Trade Commission, a quasi-judicial, independent body that often moves at its own pace.

The ITC hasn’t formally kicked off its analysis with a required public notice. Commission officials have also resisted past administration requests to speed up their work.

The law technically gives the ITC up to 105 days to do its analysis after the deal is signed but leaves open the possibility of starting the study earlier. Experts say the law could technically allow Congress to introduce implementing legislation and even vote on a deal before the analysis is completed — but such a move could risk support from lawmakers who view the study as vital for informing their vote.

“If they adhere to procedures, it would be impossible,” said Reinsch of CSIS. “But we looked at the statute and concluded they don’t have to do that. They could run roughshod over the process.”

For now, Lighthizer and his team are hoping they can sell the deal to union leaders and Democrats, many of whom say that Mexican labor conditions are a crucial issue that the new pact needs to address. The new deal puts pressure on Mexico to implement long-awaited labor overhaul. In one positive sign, the incoming Mexican government has already signaled that it will pass legislation by the by the end of the year that ensures a right to collective bargaining and secret votes for members of labor unions.

“I don’t think Lighthizer is the least bit afraid of a House controlled by Dems — and I think he’s played those cards well,” said the Democratic aide, who added that Lighthizer “is still looking for affirmation from Dems — and a particular subset of Dems — to show that the president has delivered.“