Trade Subcommittee Chairman Says NAFTA 2.0 'Scrambling Some Traditional Thinking'

Since the NAFTA rewrite was completed, it's been "fascinating" to hear from the groups who have always opposed trade deals in the past, said Rep. Earl Blumenauer, the Democrat from Oregon who leads the House Ways and Means Trade Subcommittee. While he said that union leaders aren't comfortable with NAFTA 2.0, and they want changes to it, they "will kind of acknowledge they don't want to withdraw" from NAFTA, and say that "NAFTA 2.0 represents an improvement."

Blumenauer says he's working to find consensus on Ways and Means on how to describe the changes they want in enforcement, biologics, the environment and labor, so that U.S. Trade Representative Robert Lighthizer can respond by saying what he's willing to do to satisfy House Democrats' complaints. "I've seen him more on the Hill than some of my colleagues," Blumenauer said, adding that the USTR has met with any group that asks him. "Left-handed people from the Midwest ..." he quipped at a May 8 event at the Center for Strategic and International Studies.

When asked by International Trade Today what specifically he wants addressed in environment, Blumenauer said the original NAFTA said Mexico would spend $15 million to clean up the New River and the Tijuana River, and nothing was achieved. "These are open sewers, cesspools." When asked if the U.S. should provide aid to Mexico to fund remediation, he said we shouldn't jump to that conclusion. "Let's find out what both sides are doing, and what both sides are doing in terms of the enforcement of their own provisions...? Because there are industries, money-making industries, that are a major part of this problem. How much should the Mexican taxpayer, the American taxpayer [shoulder] as opposed to people that are polluting? I think these are areas for negotiations. I'm not opposed to investing in environmental cleanup, but I want to make sure that it's balanced, and I want to make sure we're not giving a pass to the people who created the problem."

Even though the House is supposed to vote on trade agreements on a fast track, Blumenauer made it clear it's the House majority that will decide the timeline. "There's no advantage to us to rush this through, to paper over the divisions we have." So he said the party will work to reach consensus, a process he characterized as "taking the time to get it right."

After NAFTA passed, "the fury built up" among those who felt it was damaging to the U.S., he said, and it was partly fueled by "the fact that proponents of NAFTA 1.0 were slow to acknowledge" it didn't live up to all its promises.

"I represent a region that is intensely dependent on trade," he said, mentioning Intel, Boeing, Nike and Adidas. "And at the same time, I probably represent a more intense group of trade skeptics. I represent Portlandia, after all."

Blumenauer said it's ironic that much of the NAFTA rewrite borrows from the Trans-Pacific Partnership, which faced fierce objections from labor and groups on the left. Even the TPP, though, he said, didn't use a 10-year exclusivity period for biologics. Instead, it was five or possibly eight years under certain conditions. "The pharmaceutical issues are a flashpoint in this Congress," he said. Blumenauer said that just the night before, he was taking to Mexican government officials, and they said the 10-year exclusivity "was forced upon them."

Moderator Bill Reinsch asked Blumenauer if Mexico will reopen the deal to change the biologics provision. "Let's see what happens," he replied. Blumenauer said he dislikes the 10-year provision because "it does set an expectation of what we're going to do domestically."

He said Democrats will see what the administration's tolerance is for modifying the pact. He noted, "I think it's clear that [House] Speaker [Nancy] Pelosi has demonstrated in the past she's not going to move if she's not comfortable with it." Blumenauer also said, "We'd like to get it done in the summer. I don't think anyone wants to see it put off into the fall." He said if it slipped into 2020, it would "get intensely politicized" because of the proximity to the Trump re-election campaign, and that would kill its chances of passage.

He said Lighthizer has had "lots of warm, fuzzy, encouraging conversations," but he's been light on specifics. And without some specifics, there won't be progress in the next two months.