The rewrite of the North American Free Trade Agreement is apparently about to sink, ratcheting up the anxiety for the automakers with operations in Mexico.
“House Democrats say there’s little-to-no chance that Congress will take up President Donald Trump’s proposed replacement for the North American Free Trade Agreement (NAFTA) before the end of summer,” observed The Hill, a conservative-leaning publications that follows developments in Congress.
The Hill noted “with only three more weeks scheduled to be in session before the August recess, House Democrats from across the spectrum are demanding that the trade pact with Mexico and Canada be renegotiated, citing concerns with the implications for labor and environmental standards as well as drug prices.”
The Trump wanted the proposed replacement for the NAFTA, the proposed U.S.-Mexico Canada Agreement done this year so it wouldn’t get caught up in the 2020 Presidential campaign.
Sidelining the NAFTA replacement, however, could give Trump another justification for the Trump administration to scuttle NAFTA altogether – something that the automakers don’t want at all.
The American Automotive Policy Council, the lobbying organization for General Motors, Ford and Fiat Chrysler, last month urged Congress to move ahead with the NAFTA revision.
“We call on Congress to resolve the outstanding issues and quickly take up this modernized trade agreement and pass it without delay,” said Matt Blunt, AAPC president and former governor of Missouri, said in a letter to the Senate Finance Committee and House Ways and Means Committee.
“The USMCA addresses barriers to free trade and will help position U.S. autos and our manufacturing supply chain to grow and compete in today’s global economy.”
Passing the USMCA would be a major legislative accomplishment for Trump as he campaigns for reelection next year. Despite their eagerness to see Trump out of office, Democrats say they want to replace the existing North American trade agreement.
House Speaker Nancy Pelosi, however, has indicated to reporters that House Democrats and their allies in organized labor are looking for major changes in the proposed agreement negotiated by the Trump administration.
But the Trump administration, as well as the Canadian and Mexican governments, have been resistant to reopening the negotiations. Mexico became the first country to ratify the agreement last month, while Canada has yet to do so amid the uncertainty in the U.S., according to The Hill.