WASHINGTON – The Trump administration in 2018 forced the governments of Canada and Mexico into months of arduous and often acrimonious negotiations that ultimately led to the US-Mexico-Canada Agreement (USMCA), which, if approved by the parliaments of all three nations, will replace the 25-year-old North American Free Trade Agreement (NAFTA). The administration in 2019 faces the challenge of muscling the new agreement through the 116th Congress with the House of Representatives now under control of the Democrats.
Democratic control of the House doesn’t necessarily spell the death knell for the USMCA, but it does indicate traditionally Democratic constituencies, such as labor, who felt their voices weren’t heard during the negotiations will now be very much part of the conversation as Congress turns its attention to the treaty.
Most food and agriculture industry organizations, initially skeptical of the administration’s drive to cashier or renegotiate NAFTA, turned supporters of the USMCA once they were confident their initial admonition to the administration, “do no harm,” seemed to have been heeded. The task ahead for treaty supporters was to address, even if not satisfy, concerns of remaining skeptical constituencies.
The USMCA was signed by President Donald Trump, Canadian Prime Minister Justin Trudeau and former Mexican President Enrique Peña Nieto on Nov. 30 in Buenos Aries, Argentina, just ahead of the G-20 summit. With the ink on the treaty barely dry, Trump on Dec. 1 warned Congress that he would withdraw the United States from NAFTA if lawmakers didn’t move expeditiously to approve the USMCA.
“I’ll be terminating it within a relatively short period of time,” Trump tweeted. “We get rid of NAFTA. It’s been a disaster for the United States.”
Should procedures established by the Trade Promotion Authority law passed in 2015 be followed, there will be opportunity for treaty critics to voice their concerns and even vote down the agreement.
In the latter case, NAFTA would remain in force unless Trump makes good his threat to unilaterally withdraw the United States from the agreement.
But first, according to TPA procedure, from Nov. 30, the date the agreement was signed, the administration has 60 days to report to Congress on what changes to US law might be required to comply with the agreement. Within 105 days of the agreement’s signing, the International Trade Commission must complete a study of the agreement’s economic impact. These actions will inform congressional deliberations on legislation that would implement the trade agreement.
Thirty days before the administration submits its draft USMCA implementing bill to Congress, it must provide legislators with the final legal text of the trade agreement and a draft of a Statement of Administrative Action (SAA) by which it proposes to implement the accord.
After Congress receives the final implementing bill and final SAA from the president, it has 90 days of being in session to act on the legislation. Unlike the implementing bill, the treaty itself may not be amended during the process.
Within that 90-day span, the implementing legislation first will be referred to the House Ways and Means and Senate Finance Committees. House Ways and Means may take up to 45 days in session to consider the bill and report it to the House floor. If the committee does not act within 45 days, the implementing legislation will be automatically discharged to the full House.
Once the implementing legislation is on the floor, the House must vote it up or down within 15 session days.
Should the House pass the implementing legislation, the TPA provides the Senate Finance Committee 15 days to consider and vote on it, at which point it will be automatically discharged to the Senate floor. The full Senate then has 15 session days to deliberate before it votes the implementing bill up or down.
An indication of the gauntlet through which the legislation may have to run was provided by a statement issued by newly installed Speaker of the House Nancy Pelosi of California in response to the signing of USMCA.
“Every proposed trade agreement must be judged by whether it improves the wages, working conditions and well-being of America’s workers and farmers,” Pelosi said. “This agreement is still a work in progress.”
Should the TPA process frustrate Trump in the next several weeks, or if the USMCA fails to receive the support required to pass both houses of Congress, he has the option of notifying Canada and Mexico that he intends to withdraw the United States from NAFTA on his own authority. After 60 days of issuing the notice, the president may withdraw the United States from the agreement.
It was uncertain whether Trump’s threat to withdraw from NAFTA was real or a negotiating tactic to spur Congress to act quickly and pass what the president has asserted was a historic agreement. A withdrawal from NAFTA would mark another venture into uncharted territory both for the US government, as the president’s authority to withdraw from NAFTA may be challenged, and for relations with this nation’s most important trading partners.