President Donald Trump should reopen talks with Canada and Mexico to strengthen labor and environmental provisions of his new North American trade agreement, advocates told Congress on Wednesday.
“The revised NAFTA maintains the fundamental flaws carried over from past trade agreements, especially the original NAFTA,” Owen Herrnstadt, a top official at the International Association of Machinists and Aerospace Workers, told the House Ways and Means Trade Subcommittee at hearing on the new U.S.-Mexico-Canada Agreement.
The Trump administration has so far ruled out restarting talks with Mexico and Canada. But U.S. Trade Representative Robert Lighthizer has promised to work with Democrats to address their concerns about labor, environmental and pharmaceutical provisions, as well as the overall enforceability of the pact.
Reopening the agreement could push congressional consideration into 2020 or beyond, potentially depriving Trump of an important legislative victory as he runs for reelection.
During Wednesday’s hearing, Rep. Jason Smith (R-Mo.) accused Democrats of throwing up obstacles to approval of the agreement just to deny Trump a victory.
“We haven’t held a vote [on USMCA] because it is politically inconvenient for Democrats to move something this president supports. Just like it is politically inconvenient for them to let go of the collusion narrative,” Smith said.
But Rep. Earl Blumenauer (D-Ore.), who chaired the hearing, defended Democrats’ handling of the agreement.
“We’re moving on a good faith effort to try to come together on issues that people on both sides of the aisle tell me matters to them,” Blumenauer said.
“Enforcement matters to our leadership. I think it matters to your members. And I just take exception to the notion that this is an example of slow-walking” the deal.
That point was underscored by Rep. Jimmy Panetta (D-Calif.), who represents an agricultural district that has benefited from NAFTA.
“A lot of members want to get to ‘yes’ on this agreement, but certain things need be put in place,” Panetta said.
Despite Trump’s reluctance to reopen the pact, several witnesses said direct talks with Mexico and Canada were the only way to fix the problems they see.
Republicans pushed back by pointing to the Mexican legislature’s recent approval of labor law changes, which they attributed to U.S. pressure in the USMCA talks.
But Sandra Polaski, a former deputy director-general for policy at the International Labor Organization, said those changes would take many years to implement. The Mexican Senate has also left open the possibility of amending them before they take effect, she added.
“Meanwhile, low wages will continue to punish Mexican workers and will continue to undermine U.S. wages,” Polaski said. “Given the profound flaws in the enforcement mechanism of USMCA, along with this uncertainty about the future of Mexican reforms, a more robust approach to enforcement must be added to the agreement.”
Polaski, who served as a high-ranking labor official in the Obama administration’s State Department, said one option for the Trump administration would be to incorporate a plan crafted by Senate Finance ranking member Ron Wyden (D-Ore.) and Sen. Sherrod Brown (D-Ohio) into the USMCA.
That would require Mexico to conduct inspections of factories accused of poor working conditions. It would target Mexico’s pledge to comply with specific labor commitments it made in the deal, including giving workers the right to organize independently from the country’s government-sanctioned labor unions and improving the country’s labor arbitration system.
“One of the benefits of this approach is that it provides a valuable mechanism for addressing these problems through cooperation rather than litigation,” Beth Baltzan, a former U.S. trade negotiator who now leads her own trade advisory group, told the lawmakers.
Certain language in the environmental chapter of the agreement should also be strengthened to make it more enforceable and to stop illegal trade in protected natural resources, testified Alexander von Bismarck, executive director of the Environmental Investigation Agency, a nongovernmental organization.
“For the new NAFTA to be part of a global trend towards shutting down the market of stolen natural resources, it must result in clear prohibitions on such illegal trade, as well as strong sanctions and penalties,” von Bismarck said.
Von Bismarck also raised concerns about global climate change. “A trade agreement that stimulates trade and does not take specific measures to address climate change will worsen it, and this agreement does nothing to address climate change directly,” he said.
Only one of the five witnesses, Devry Boughner Vorwerk, vice president for global corporate affairs at Cargill, called for approval of USMCA in its current form.
But she also told the panel the agribusiness giant does not like some of the USMCA’s changes to NAFTA. One particular concern has to do with investor-state dispute settlement provisions, which are less comprehensive than in the old agreement and would not protect Cargill’s capital investments in Canada and Mexico.
“This is where I think there’s an opportunity to get in under the hood … to make sure ISDS applies comprehensively across all sectors,” Vorwerk said.