Donald Trump, House Democrats strike deal on revised trade pact with Mexico, Canada

Show Caption Hide Caption Trump celebrates new trade deal, called USMCA U.S. President Donald Trump is boasting about his latest revamped trade agreement with America's two neighbors - a pact he's calling USMCA - for the United States, Mexico and Canada. The deal has a "good ring to it," he says. (Oct. 1)

WASHINGTON – House Democrats and President Donald Trump struck an agreement to revise a new trade deal with Mexico and Canada, delivering a win for the president on a top legislative priority.

House Speaker Nancy Pelosi, D-Calif. announced the agreement at a news conference Tuesday morning, calling the revised trade pact "a victory for America's workers." She did not say when the House would vote on the agreement but suggested it could happen before the end of the year.

Top trade officials from the United States, Mexico and Canada are to meet in Mexico City for an afternoon ceremony, according to government schedules.

Pelosi and other Democrats said the agreement includes stronger provisions on labor, enforcement and pharmaceuticals that they sought as conditions for putting the United States-Mexico-Canada Agreement, or USMCA, to a vote in Congress.

Pelosi described the deal as "infinitely better" than the agreement the Trump administration proposed to Congress.

The Trump administration has been pushing Congress to ratify the trade agreement before the end of the year. The revisions could clear the way for congressional approval of the deal even as House Democrats prepare impeachment proceedings against Trump.

Shortly before Pelosi's news conference, Trump took to Twitter and said the deal had "very good Democrat support."

"That would be great for our Country!" he wrote.

Looking like very good Democrat support for USMCA. That would be great for our Country! — Donald J. Trump (@realDonaldTrump) December 10, 2019

The trade agreement, announced 15 months ago after months of negotiations, will replace the North American Free Trade Agreement, or NAFTA, a nearly quarter-century-old accord that essentially eliminated tariffs on most goods traded among the three countries.

Trump blamed NAFTA for the loss of American jobs and frequently slammed it as the “worst trade deal ever” during the 2016 presidential campaign. After taking office, his administration opened talks with Mexico and Canada to rewrite the agreement.

The new trade pact includes rules for the movement of products among the three countries. Among the provisions are a requirement that a higher percentage of autos be made from parts manufactured in North America.

Under NAFTA, automakers qualify for zero tariffs if 62.5% of their vehicles’ components are manufactured in the USA, Canada or Mexico. That figure would jump to 75% under the new deal. Starting in 2020, 30% of vehicle production would have to be done by workers earning an average production wage of at least $16 per hour. By 2023, that percentage would rise to 40%.

The agreement would run for 16 years but would be reviewed after six years and could be extended for another 16.

Trump and the leaders of Mexico and Canada signed the deal late last year, but Congress has yet to approve the agreement. Trump blamed Pelosi for the delay, accusing her of holding it up under orders from labor unions.

More: What is NAFTA? Seven things to know about the North American free trade pact

The trade agreement included some policies embraced by Democrats, including stronger labor standards and environmental provisions. Labor groups complained that those provisions didn’t go far enough and that the agreement did not include sufficient mechanisms to enforce the requirements.

When Democrats gained the House majority in January, Pelosi and other Democratic leaders began negotiations with the Trump administration to revise the trade pact to address those concerns.

Among the changes that Democrats added to the agreement are a series of enforcement and accountability provisions, including the establishment of attachés in Mexico City to regularly monitor environmental laws, regulations and practices.

Democrats struck a pharmaceutical provision that they argued had been a gift to makers of expensive brand-name drugs.

U.S. law provides pharmaceutical companies with 12 years of market protection for their drugs, which means no generic copies of their medicines can be introduced during that period. Canada grants drugmakers eight years of market protection, and Mexico provides five.

The trade proposal offered by the Trump administration would have provided drugmakers with a minimum of 10 years of market exclusivity, which would have extended the time that residents of those countries would wait before generic copies of their drugs were available. Critics said that would drive up the cost of medicine for consumers.

Rep. Jan Schakowsky, D-Ill., who was involved in the trade talks, said that provision was eliminated. “It is gone," she said.

Richard Trumka, president of the AFL-CIO, endorsed the revised trade agreement. Though the deal is "far from perfect," he said, "there is no denying that the trade rules in America will now be fairer because of our hard work and perseverance."

The U.S. Chamber of Commerce also applauded the agreement. "We are optimistic this development will open the door to final approval of USMCA on a bipartisan basis by the end of the year, which will especially benefit American farmers, manufacturers and small businesses," said Thomas Donohue, the chamber's CEO.

Some Republicans questioned whether negotiators overcompensated on revamping the agreement to get Democratic votes.

Sen. John Cornyn, R-Texas, declined to endorse the revised version, saying he needed to look at the details.

“I look forward to reviewing the agreement, hearing how it will impact Texas and providing feedback," Cornyn said.

Mexico’s Senate has ratified the agreement, but Canada is waiting for the U.S. Congress to act before it approves the pact.

More: Trade deal with Canada, Mexico could delay arrival of cheaper generic drugs, critics warn