Trade Lawyers Say USMCA Text's Submission to House Not An Effort to Jam Pelosi

Although the Speaker of the House said the administration's decision to send over its Statement of Administrative Action and legal text of the U.S.-Canada-Mexico Agreement was "not a positive step," some NAFTA watchers said this should not be seen as a sign that the administration is trying to force the speaker's hand and demand a vote before the August congressional recess.

U.S. Trade Representative Robert Lighthizer sent over a conciliatory letter to Pelosi May 30 that called the submission a "procedural formality," and noted that its submission does not "formally start the countdown to a vote." He said that the administration sending an SAA now makes is possible that "Congress will have sufficient time to consider the USMCA before the August recess if the leadership deems that appropriate."

He emphasized that the SAA "does not limit our ability to find solutions to address concerns Members have raised about enforcement of the labor and environmental provisions of the Agreement and pharmaceutical pricing," and wrote: "The draft SAA is just that -- a draft."

Still, the timing was not ideal, said Stephen Claeys, a partner at Wiley Rein and former trade counsel for the Republican majority on the House Ways and Means Committee. "They’re extremely sensitive to looking like they’re being jammed," he said of House Democrats. "I don’t see the upside" for the administration of sending it over before there's been more progress on resolving concerns.

Dan Ujczo, a partner at Dickinson-Wright and a close NAFTA watcher, said in a May 30 email to International Trade Today: "I think folks (including labor) are conflating SAA/final text of USMCA (filed today) with the implementing legislation submission that actually starts the TPA clock. I do not believe that this will be viewed as pressuring the Speaker. Now if they file the implementing legislation without her assent, the USMCA will be DOA."

AFL-CIO President Richard Trumka issued a statement May 31 complaining about the rush. "The USTR’s emphasis should be on making the new NAFTA enforceable for Americans, rather than creating a rush to a finish line that is little more than an illusion."

Claeys said the earliest the administration could send the implementing legislation over would be July 9, and since Congress recesses July 26, that's not much time for a vote.

Ujczo said there's less than a 50 percent chance of there being a House vote before July 26.

But Claeys is also not optimistic about ratification in September or October. "This fall’s going to be very difficult legislatively," he said. "We’re going to have government funding, we’re going to have to work that through, there’s the debt ceiling; all of this stuff."

Still, he sees signs that the Democrats are sincere about ratifying the agreement. The decision to set up working groups to work on enforcement, labor, environment and biologics is "all positive. It sets up the negotiating infrastructure to more effectively work through the issues." Ujczo said there are solutions to all of those issues, but they will take time to develop.

Claeys said some White House aides may believe that it's to their advantage to accelerate the timeline either to have pro-trade Democrats put pressure on Pelosi to bring it to the floor so it can pass with mostly Republican votes, or to just make the Democrats look like they're obstructing Trump at every turn, and use that message in 2020.

Claeys said that folks who have more insight than he does into internal Democratic politics in the House say the former won't work. "The Democratic members who won Republican seats ... might be a little more pro-trade," he said, but he's skeptical that they would be blamed by voters if the NAFTA rewrite doesn't come up for a vote.

The submission of the SAA was quickly followed by the White House announcement that it would levy tariffs on Mexico because Mexico is not doing enough to stem the flow of Central American migrants through their country. Rep. Rosa DeLauro, a Connecticut Democrat who has been a longtime NAFTA foe, responded May 31, saying, "By announcing that he would arbitrarily slap trade sanctions on Mexico over immigration issues, President Trump has potentially derailed progress on a new NAFTA deal that could stop the ongoing outsourcing of American jobs."

Rep. Kevin Brady, R-Texas, the top Republican on the Ways and Means Committee, did not criticize the path the president is taking to pressure Mexico, but said that Congress members cannot pass the new NAFTA if there are escalating tariffs on Mexico.

Trade Subcommittee Chairman Earl Blumenauer, D-Ore., also tied the two issues. “It’s hard to see how Trump’s tax on Americans will do anything that helps us build the cooperation necessary to deal with border issues with our neighbor and largest trading partner, Mexico," he said. "This reckless decision by Trump casts a cloud over our work to strengthen the proposed USMCA and its chances this Congress."