Trump Claims Nafta Victory but Deal Faces Long Odds in U.S.

Trump Claims Nafta Victory but Deal Faces Long Odds in U.S.

Image
President Trump, President Enrique Peña Nieto of Mexico, left, and Prime Minister Justin Trudeau of Canada held a ceremonial signing of the Nafta replacement on Friday in Buenos Aires.CreditCreditTom Brenner for The New York Times

President Trump declared victory on Friday at a ceremonial signing of the new North American Free Trade Agreement in Buenos Aires, predicting that gaining congressional approval needed to enact the pact with Mexico and Canada would not be “very much of a problem.”

In reality, it is a problem. The trade pact’s political fate — already uncertain given Democrats will soon control the House — has only dimmed since General Motors said this week that it planned to idle five factories in North America and cut nearly 15,000 jobs to trim costs.

Congressional Democrats remain open to supporting a revised trade deal. But they — along with business leaders and free-trade Republicans — have become increasingly pessimistic that the new United States-Mexico-Canada Agreement can win enough votes in the House without significant concessions from Mexico, like mandatory wage increases, to stem the loss of American automobile and other factory jobs.

Representative Nancy Pelosi, the California Democrat in line to lead the House next year, described it on Friday as a “work in progress” and cautioned that the current draft did not go far enough. “What isn’t in it yet is enough enforcement reassurances regarding workers, provisions that relate to workers and to the environment.”

Senator Chuck Schumer, the New York Democrat, said that without changes, Mr. Trump “will have real trouble getting Democrats to support the deal.”

At least one major labor union, the 600,000-member International Association of Machinists and Aerospace Workers, came out against the new agreement on Friday, a move that could encourage other labor leaders to ratchet up criticism of a deal most view as, at best, a modest improvement on the 25-year-old Nafta.

“As currently written, and without further changes along the lines we continue to propose, Nafta 2.0 will do little if anything to stop the outsourcing from the U.S. and Canada and the related wage suppression of workers in Mexico,” said Robert Martinez Jr., the union’s president. “Unless major changes are made, we cannot support Nafta 2.0.”

Representative Marcy Kaptur, a Democrat who represents a heavily industrial swath of Ohio from Toledo to Cleveland, criticized the ceremonial signing as a “staged production” and signaled that other Midwest Democrats, a key voting bloc in the House, would not support the deal without major changes.

“President Trump has claimed premature victory,” she said.

Mr. Trump has been promising to “rip up” Nafta since he began running for president, and the ceremonial signing on Friday came after more than a year of tense and often acrimonious negotiations over the trade agreement’s provisions, particularly those related to auto production and dairy.

Mr. Trump pushed hard behind the scenes to ensure that Friday’s symbolic, flag-bedecked signing ceremony with the leaders of Canada and Mexico took place. His staff spent much of the preceding 48 hours coaxing Prime Minister Justin Trudeau of Canada to appear at the event so that three North American leaders, not just Mr. Trump and President Enrique Peña Nieto of Mexico, would appear onstage, according to people familiar with the planning.

But it was strictly ceremonial. Under the United States’ fast-track trade rules, the deal must pass the House, where all bills that affect federal revenue must originate, before moving to the Senate for final passage.

Technically, the deal that the three trading partners signed cannot be altered. But in reality, the administration is free to renegotiate with Canada and Mexico to make changes that could ultimately be included in final legislation. If nothing is passed, Mr. Trump could pull out of Nafta, as he has long threatened, or simply continue operating under the old rules.

The Democratic takeover of the House has created anxiety among business groups and legislators, who are urging Republican leaders to push for a vote on the proposal in the lame-duck session, before Democrats assume control.

“Manufacturers need certainty now, not later,” said Jay Timmons, president and chief executive of the National Association of Manufacturers. “With two million American jobs dependent on exports to Canada and Mexico, Congress needs to move expeditiously.”

Mr. Timmons’s group, along with other trade associations and Republican Senators Lamar Alexander of Tennessee and Patrick J. Toomey of Pennsylvania, are pressing House and Senate leaders to quickly pass the deal.

Senator Sherrod Brown, a Democrat from Ohio, has been quietly pushing a revision to the trade agreement aimed at improving wages and working conditions in Mexico. The provision would require that Mexican imports to the United States be certified as having been produced in accordance with labor standards, according to American officials.

The plan, which won the support of Robert E. Lighthizer, the United States trade representative, this year, would carry stiff criminal penalties for importers who violate the trade agreement and would also bolster inspection procedures.

But it was rejected by Mexican officials, including the incoming president, Andrés Manuel López Obrador, according to two people familiar with the talks. But Mr. Brown, who is close to Mr. Lighthizer, is renewing his push to increase the pressure on Mexico, and is likely to submit a range of proposals to the administration, a spokeswoman for Mr. Brown said.

President Trump badly wants union leaders to back his signature trade deal, but they have thus far demurred.

He has met with labor officials three times since February urging them to sign onto the new deal, according to administration officials, repeatedly assuring participants that he was driving the hardest possible bargain.

In recent months, Mr. Trump’s aides stepped up their courtship in a futile attempt to persuade union leaders, especially the United Steelworkers president, Leo W. Gerard, to publicly back the new Nafta before the midterms. But Mr. Gerard has held off, and on Friday he pressed the White House to negotiate a better agreement.

“Only when all the issues have been resolved and it’s clear that Mexico is fully and faithfully recognizing workers’ rights, should Congress vote on the agreement and implementing legislation,” Mr. Gerard said in a statement.

There are also lingering concerns about the deal in Canada, where officials remain incensed that the agreement does not include a deal to lift the sweeping steel and aluminum tariffs that Mr. Trump has imposed on Canada, Mexico and other allies.

Until late Thursday night, it was not clear that Mr. Trudeau would attend the signing.

Mr. Lighthizer and his Canadian counterparts wrangled over a possible deal that would impose quotas on metal imports in exchange for a gradual decrease in the tariffs of 25 percent on steel and 10 percent on aluminum. But those talks have so far failed.

If Mr. Trump celebrated the agreement as a fulfillment of his campaign promise to scrap Nafta, Mr. Trudeau played down the deal as a backstop that “maintains stability” for his country’s economy.

“That’s why I’m here today,” he said alluding to his last-minute decision to appear in front of the cameras with Mr. Trump and Mr. Peña Nieto.

But his attendance also seemed intended to temper Mr. Trump’s glee, and he lamented recent North American plant closures by General Motors as “a heavy blow” and sharply criticized the metal tariffs as an unnecessary drag on the economies of both countries.

“Donald, it’s all the more reason we need to keep working to remove the tariffs on steel and aluminum between our countries,” he said as Mr. Trump looked on.

Advertisement

Let’s block ads! (Why?)

NYT > U.S.