Great news for American workers! The Trump administration and House Democrats have reached an agreement in principle on modest modifications to the United States, Mexico and Canada Agreement (“USMCA”), opening the way to enacting the president’s signature trade deal.
It’s unquestionably a win for the president but, more importantly, as Speaker Pelosi stated, its “a victory for American workers.”
I predict that the USMCA will pass and become law. Then, more Americas will find good-paying jobs and our economy will grow by tens of billions of dollars.
The U.S., Mexico and Canada reached an agreement 15 months ago. Even in our jubilation that this agreement will pass, we could reasonably ask why it took the Democrats -- with the support of their union allies - 15 months to allow a vote.
Could it be due to the Democrats’ reluctance (intransigence?) to do anything that might benefit President Trump even if it also clearly benefits the American people?
Perhaps we had to wait for the Speaker to become more concerned with avoiding claims of heading a “do nothing” Congress than with giving the president a win.
We could question if Monday’s announcement is intended to defray attention from a politically disastrous impeachment effort and a damaging IG report on FBI misconduct. Or, we could ask if the Speaker calculated that handing the president a major win on the same day Democrats announce their impeachment charges against him was the best way to limit coverage of his well-deserved victory on trade.
Clearly, the delay was not due to meaningful or unresolvable problems with the USMCA itself. The USMCA will replace NAFTA, the nearly quarter-of-a-century old agreement candidate Trump called “the worst trade deal ever” during the 2016 campaign. It was also an agreement Big Labor criticized from its inception as detrimental to the interests of American workers.
You would have thought the unions and the Democrats would have been anxious to approve the deal on its merits.
That's because the USMCA’s labor protections go far beyond anything in any other trade agreement, and certainly beyond anything in NAFTA.
It requires the parties to acknowledge the right to collectively bargain and strike while guaranteeing freedom of association.
It prohibits “all forms of forced and compulsory labor" and requires that the parties adopt and maintain labor standards as recognized by the International Labor Organization’s Declaration on Rights at Work.
It also includes first of its kind language requiring that the parties address violence against workers who exercise their labor rights.
The USMCA’s provisions also include a requirement that a higher percentage of autos be made from parts manufactured in North America. To qualify for zero tariffs under NAFTA, automakers need only manufacture 62.5 percent of their vehicles’ components in the U.S., Canada or Mexico. Under the USMCA, that percentage increases to 75 percent, making it more difficult for producers to take advantage of zero tariffs while manufacturing components in non-member nations.
Starting in 2020, workers earning an average wage of at least $16 per hour have to be responsible for at least 30 percent of vehicle production. That percentage increases to 40 percent by 2023, making it more difficult for Mexican labor to undercut U.S. labor on costs.
Sounds pretty darn good. So, what kinds of changes were the Democrats and the unions insisting the president make over the last 15 months?
While we don’t as yet have the final document, Secretary of Commerce Wilbur Ross, speaking with Maria Bartiromo on Fox Business’ “Mornings with Maria,” Tuesday stated that “the remarkable thing is that it took so long to make such small changes insisted on by the Democrats.”
According to Secretary Ross, those changes include, first some “tweaks” in the areas of “labor enforcement:" Here's what he said:
"Now, the joke there is that the NAFTA agreement had no enforcement provisions, so anything here would be better than what was in NAFTA. Second, there were some tweaks to digital commerce, liability questions and some fairly technical issues. And third, they were complaining about the number of years protection biologics would get against generics coming in."
Basically, we’ve waited 15 months for “tweaks.” -- Seriously, we have waited for “tweaks.”
Still, rather than attempting to diminish the Speaker by questioning her motives, we should praise her. In a very difficult time politically, with an unstable cabal of left-wing socialists having seized control of the Democrats’ agenda, she is going to bring this unquestionably positive agreement up for a vote. That takes some political skill.
The president will undoubtedly benefit -- and so he should. But so will the American people and that is, after all, why we send people to Washington in the first place.
Like sausage, we may not want to observe how it's made but we can appreciate the finished product.
Andy Puzder was the chief executive officer of CKE Restaurants for more than 16 years, following a career as an attorney. He was nominated by President Trump to serve as U.S. labor secretary. In 2011, Puzder co-authored "Job Creation: How It Really Works and Why Government Doesn't Understand It." His latest book is "The Capitalist Comeback: The Trump Boom and the Left's Plot to Stop It" (Center Street, April 24, 2018).