Trump Looks to Sign Trade Deal

It will be a major rewrite of the rules of trade with Canada and Mexico.

President Donald Trump speaks during a campaign rally at the Wildwoods Convention Center Oceanfront, Tuesday, Jan. 28, 2020, in Wildwood, N.J.
President Donald Trump speaks during a campaign rally at the Wildwoods Convention Center Oceanfront, Tuesday, Jan. 28, 2020, in Wildwood, N.J.
AP Photo/ Evan Vucci

WASHINGTON (AP) — President Donald Trump is eager to show off a big policy triumph during his impeachment trial by signing into law a major rewrite of the rules of trade with Canada and Mexico.

Trump made renegotiating the North American Free Trade Agreement a priority during his 2016 campaign, although trade experts say the impact of the new U.S.-Mexico-Canada Agreement will be modest. He planned to sign the bill Wednesday.

Canada and Mexico already represent the top two export markets for U.S. goods. But the pact, along with the signing of a “phase one” agreement with China, dials down trade tensions that contributed to slowing economic growth globally.

The leaders of the three nations signed the new pact in late 2018. Legislation implementing the North American deal received overwhelming, bipartisan support in Congress after several months of behind-the-scenes negotiations between Democratic lawmakers and the Trump administration.

Still, it appeared that prominent Democratic lawmakers were left off the White House guest list for Wednesday’s event. The snub came after the Democratic-led House impeached Trump.

“What the president will be signing is quite different from what the president sent us,” House Speaker Nancy Pelosi, D-Calif., said Wednesday. “We were able to make vast improvements. If we weren't, we would not have been able to pass the bill.”

Rep. Richard Neal, chairman of the House Ways and Means Committee, said it only passed Congress because of how the Democrats forced changes in Trump's original proposal. “They voted for it for one reason, is because of how we shaped and altered the president's proposal,” said Neal, D-Mass.

Trump has billed the agreement as a “a new model of trade for the 21st century.” Speaking to supporters at a New Jersey rally on Tuesday night, Trump said: “Tomorrow we will replace the NAFTA nightmare, one of the worst trade deals ever in history."

NAFTA, which took effect in 1994, tore down trade barriers between the three North American countries and commerce between them surged. But Trump and other critics said NAFTA encouraged factories to leave the United States and relocate south of the border to take advantage of low-wage Mexican labor.

Trump threatened to leave NAFTA if he couldn't get a better deal, creating uncertainty over regional trade.

His trade negotiator, Robert Lighthizer, pressed for a revamped pact designed to bring factory jobs back to the United States. The new agreement, for example, requires automakers to get 75% of their production content (up from 62.5% in NAFTA) from within North America to qualify for the pact's duty-free benefits. That means more auto content would have to come from North America, not imported more cheaply from China and elsewhere.

At least 40% of vehicles would also have to originate in places where workers earn at least $16 an hour. That would benefit the United States and Canada — not Mexico, where auto assembly workers are paid a fraction of that amount.

The independent U.S. International Trade Commission last year calculated that the U.S.-Mexico-Canada deal would add 0.35%, or $68 billion, to economic growth and generate 176,000 jobs over six years — not much of a change for a $22 trillion economy with 152 million nonfarm jobs.

“It's a blip,'' said Syracuse University economist Mary Lovely, who studies trade. “The main thing is what it isn't: It isn’t a continuation of uncertainty, and it isn’t a major disruption'' to business.

Critics include environmental groups concerned that the agreement does not address global warming. Some conservatives say the agreement will make cars and other products more expensive for consumers.

The president wasn't wasting any time highlighting the deal in battleground states that will determine who wins this year’s presidential election. He will travel Thursday to Michigan, where some of the state’s auto workers should benefit from a deal that encourages more manufacturing in the United States.

Trump wants to talk up a deal that about 4 in 5 Americans have heard little or nothing about. Indeed, while a third of the public approves of the deal and only 5% disapprove, a solid majority, 61%, have not formed an opinion, according to a recent poll conducted by Monmouth University.

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