Democrats, White House forge new North American trade deal

WASHINGTON — House Democrats and the White House announced a deal on a modified North American trade pact, handing President Donald Trump a major Capitol Hill win Tuesday on the same day that impeachment charges were announced against him. Both sides hailed the deal as a win for American workers.

They said the revamped U.S.-Mexico-Canada Agreement was a significant improvement over the original North American Free Trade Agreement, with Democrats crowing about winning stronger provisions on enforcing the agreement while Republicans said it will help keep the economy humming along.

“There is no question of course that this trade agreement is much better than NAFTA," House Speaker Nancy Pelosi, D-Calif., said in announcing the agreement, saying the pact is “infinitely better than what was initially proposed by the administration."

Trump said the revamped trade pact will “be great" for the United States.

“It will be the best and most important trade deal ever made by the USA. Good for everybody - Farmers, Manufacturers, Energy, Unions - tremendous support. Importantly, we will finally end our Country’s worst Trade Deal, NAFTA!,” the president said in a tweet.

The deal announcement came on the same morning that Democrats outlined impeachment charges against Trump. The trade pact is Trump's top Capitol Hill priority along with funding for his long-sought border fence.

In Mexico City, Trump’s son-in-law and senior adviser, Jared Kushner, U.S. Trade Representative Robert Lighthizer and Canadian Deputy Prime Minister Chrystia Freeland joined Mexican officials to sign the updated version of the United States-Mexico-Canada trade agreement, or USMCA, at a ceremony in Mexico City’s centuries-old National Palace.

Mexican Foreign Minister Marcelo Ebrard congratulated the negotiators for reaching a second set of agreements to answer U.S. concerns about labour rights in Mexico, and regional content.

“Mission accomplished!” Ebrard told the gathered officials.

Lighthizer praised the joint work of the Trump administration, Democrats, business and labour leaders to reach an agreement, calling it "nothing short of a miracle that we have all come together.”

“This is a win-win-win agreement which will provide stability for working people in all three countries for years to come,” Freeland said. “That is no small thing.”

A U.S. House vote is likely before Congress adjourns for the year and the Senate is likely to vote in January or February. Senate Majority Leader Mitch McConnell said the vote on the trade deal will likely occur after an expected impeachment trial in the Senate.

Pelosi was the key congressional force behind the deal, which updates the 25-year-old NAFTA accord that many Democrats — especially from manufacturing areas hit hard by trade-related job losses — have long lambasted.

She and Ways and Means Committee Committee Chairman Richard Neal, D-Mass., forged a positive working relationship with Lighthizer, whom they credited with working in good faith.

“Thanks to President Trump’s leadership, we have reached an historic agreement on the USMCA. After working with Republicans, Democrats, and many other stakeholders for the past two years we have created a deal that will benefit American workers, farmers, and ranchers for years to come," Lighthizer said. “This will be the model for American trade deals going forward.”

NAFTA eliminated most tariffs and other trade barriers involving the United States, Mexico and Canada. Critics, including Trump, labour unions and many Democratic lawmakers, branded the pact a job killer for the United States because it encouraged factories to move south of the border, capitalize on low-wage Mexican workers and ship products back to the U.S. duty free.

Weeks of back-and-forth, closely monitored by Democratic labour allies such as the AFL-CIO, have brought the two sides together. Pelosi is a longtime free trade advocate and supported the original NAFTA in 1994. Trump has accused Pelosi of being incapable of passing the agreement because she is too wrapped up in impeachment.

The original NAFTA badly divided Democrats but the new pact is more protectionist and labour -friendly, and Pelosi is confident it won't divide the party, though some liberal activists took to social media to carp at the agreement.

“There is no denying that the trade rules in America will now be fairer because of our hard work and perseverance. Working people have created a new standard for future trade negotiations,"said AFL-CIO President Richard Trumka. “President Trump may have opened this deal. But working people closed it."

Business groups like the U.S. Chamber of Commerce also chimed in to support the long-delayed 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,” Thomas Donohue, CEO of the U.S. Chamber of Commerce, said in a statement.

“This agreement has been the result of painstaking bipartisan negotiations over the past year, and would not have been possible if not for the willingness of President Trump to work patiently with Democrats to get something done that he knew was in the best interests of American workers, farmers and manufacturers," said Sen. Rob Portman, R-Ohio, a former U.S. trade representative.

Republicans leaders and lawmakers have agitated for months for the accord but Pelosi has painstakingly worked to bring labour on board. Democrats see the pact as significantly better than NAFTA and Trumka's endorsement is likely to add to a strong vote by Democrats that have proven skeptical of trade agreements.

“I think the vote's going to be pretty good," said No. 2 House Democrat Steny Hoyer, D-Md., a veteran party whip. “There's a general agreement — not total agreement, it's not unanimity — that USMCA is better. It's an improvement. And to the extent that Trumka and labour comes out and says that this is an improvement, I think that that will be unifying."

The pact contains provisions designed to nudge manufacturing back to the United States. For example, it requires that 40% to 45% of cars eventually be made in countries that pay autoworkers at least $16 an hour — that is, in the United States and Canada and not in Mexico.

The trade pact picked up some momentum after Mexico in April passed a labour -law overhaul required by USMCA. The reforms are meant to make it easier for Mexican workers to form independent unions and bargain for better pay and working conditions, narrowing the gap with the United States.

Democrats succeeded in tossing overboard a 10-year protection for manufacturers of new drugs, including so-called biologics, that had won reprieve from lower-cost competition in the original accord. But Pelosi lost out in a bid to repeal so-called Section 230, a provision in a 1996 law that gives social media companies like Facebook broad immunity from lawsuits over the content they publish on their platforms.

Conservative Pennsylvania GOP Sen. Pat Toomey offered a rare GOP voice against the accord, which he said veered to the left and “undermines the free flow of capital” from the U.S. to its trading partners.

“This is basically NAFTA with a few modernizations, and some restrictions on trade and an expiration date. If people think that’s a huge improvement than I guess they’ll be happy with it," Toomey told reporters. “If people think free trade is important, they’ll presumably see it as the step backward that I see it as.’’

Toomey said Democrats had outmanuevered the administration, an assessment that Pelosi shared.

“We ate their lunch," Pelosi told her Democratic colleagues in a closed-door meeting, according to an aide in the room.

But Vice-President Mike Pence released a statement praising Trump's leadership and claiming Democrats “have finally acquiesced” in allowing a vote on the trade pact.

Associated Press writers Matthew Daly in Washington and Mark Stevenson in Mexico City contributed to this story.

Andrew Taylor, The Associated Press