House Trade Subcommittee Chairman on USMCA: 'If People Want a Deal, We Can Make One'

House Democrat working group members -- those responsible for convincing the administration to edit the new NAFTA to suit Democrats -- are encouraged and said that there is a deal to be had, if the administration continues to compromise, multiple members said in Sept. 18 interviews. Trade Subcommittee Chairman Earl Blumenauer, D-Ore., told International Trade Today Sept. 18: "We were pleased to get an answer ... it's not there [yet], but it's encouraging. We're going to meet tomorrow, and next week, and we'll just keep plugging away, narrowing the gaps, and if people want a deal, we can make one."

"I think Mr. Lighthizer is sincere on working with us on enforcement," Blumenauer said when asked which area has made the most progress.

Rep. Jimmy Gomez, D-Calif., another member of the working group, called the administration's written response "a real counter."

"Some proposals on a variety of issues, which were more sincere than I thought they would be," he said, "Now it's up to us to review it, see what makes sense, ask some more specific questions of the trade representative's office when it comes to the areas of flexibility, and then respond with a counter ASAP." Blumenauer and Gomez did not disclose any specifics.

Gomez said he wants the working group to have its counter to U.S. Trade Representative Robert Lighthizer's counterproposal by the end of next week. "Each proposal and each counterproposal starts to develop more the parameters of what the final deal will look like." Gomez said that for those trying to set odds of ratification, those odds are rising. As the working group meets with stakeholders, he said, "hopefully labor [unions] and some of these other stakeholders feel that they got what they needed, not necessarily what they want."

Gomez said that when Mexico released its Labor Department budget for the coming year, Democrats and U.S. labor unions were disappointed. "We would like to see Mexico take a more robust step on funding those reforms," he said. "My interpretation from our conversation with labor is they understand the significance of the labor reforms that are going on in Mexico, but there are questions on how quickly they can get it done, and the amount of money and resources Mexico's going to put behind it."

Gomez said he thinks there's a path to a truly enforceable trade deal. "They're proposing concepts that are real. Some of it are not completely detailed, but they're real. And that tells us there's space to negotiate. I think a couple more iterations and maybe we'll get to where we need to be. It takes time. We only have eight weeks of legislative business through the end of the year" if the House recesses on Dec. 12, as currently scheduled. Gomez said there would be conference calls during the recesses. There is a two-week district work period that begins Sept. 30.

"We haven't decided how that will play out," Gomez said of whether the working group would endorse the NAFTA rewrite once it thinks it's gotten as much as it can out of the administration. The alternative could be that the working group says its negotiations are done, and it's up to each member to decide if it's enough. "Full agreement of the working group is not necessary for the bill to move forward," he noted.

"People think it's moving slow -- it's actually moving kind of quickly," Gomez said. He said now that both sides are putting proposals on paper, that work will accelerate.

Rep. Bill Pascrell, D-N.J., a Ways and Means Committee member who is not on the working group, is much more pessimistic. He said there was not significant movement on enforcement. He also said he's very concerned about the Mexican budget for labor reform. "This is like NAFTA 1 ... they put everything in a footnote or an addendum. And we came out of NAFTA losing jobs, and we can't do the same thing with this one. We cannot."

"The president says we're right around the corner. We're not near, around the corner," he said. "Will this be used as bartering when it really comes down to push come to shove," with the Omnibus vote at the end of the year, Pascrell asked. He said that's what he's really worried about.

Majority Leader Steny Hoyer, D-Md., said at his weekly press conference that the USTR "has made steps that I think were useful and positive." And he said that Ways and Means Chairman Richard Neal, D-Mass., told other senior Democrats that he is optimistic. Hoyer said he couldn't comment on what proportion of Democrats could accept leaving a 10-year biologics exclusivity in place while adding language to the pact that if Congress lowered the U.S. exclusivity below that number, the USMCA would be amended as well. He said it is true that many in the Democratic caucus are troubled by the biologics exclusivity period.

One of the freshmen Democrat "majority makers" that the House Speaker values highly -- but not one of the moderates who have publicly asked for a vote this fall -- says that if the biologics provision has been changed as described, that's acceptable.

Rep. Angie Craig, D-Minn., said she wants the administration to strengthen enforcement of labor standards in Mexico, and wants an adjustment to its biologics proposal. "I haven't seen the text, and the details matter, but my concern has always been that if we decide to change the law to reduce that from 12 years down to seven or five, that trade agreement needed to reflect the same thing. So if that's what the trade agreement says, and there's no gray areas, then that would address my concerns."