U.S. House approves USMCA trade deal

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The U.S. House of Representatives has approved a new trade deal to replace NAFTA, with the Democratic majority voting overwhelmingly to pass one of President Donald Trump’s signature policies less than 24 hours after impeaching him.

The United States-Mexico-Canada Agreement passed by a margin of 385 to 41 Thursday afternoon, clearing its most significant procedural hurdle on the way to ratification.

The pact will now go to the Republican-controlled Senate. It may, however, take weeks or months to be taken up as it’s likely that senators will first deal with Mr. Trump’s trial after impeachment.

“Every once in a while, you get to participate in these ‘it will never happen’ moments, and I believe that this indeed is one of them,” Richard Neal, the Democratic chair of the committee that oversees trade, said in the House. “Men and women in this institution of goodwill … can find common occurrence and common ground.”

The rare moment of bipartisanship was a sign of the unusual political dynamics of Mr. Trump’s presidency. Left-wing Democrats are more aligned with the President’s protectionist trade agenda than his own party, while right-wing Republicans are so loyal to Mr. Trump that they will vote for most anything he wants. Moderate members of both parties, meanwhile, badly wanted to get the deal through to end three years of trade drama that had created uncertainty for business.

Mexico has already ratified the deal. The Trudeau government has said it will ratify once the U.S. does.

In a sharp change from the rancorous tone of the previous day, members of both parties lined up to sing USMCA’s praises Thursday. Some Democrats who said they had never before supported a trade agreement even voted for the pact.

“We made progress in this agreement. It is a framework to build on,” said Rosa DeLauro, a left-leaning Connecticut Democrat, adding that the deal would help correct “the failed status quo that hurt American workers.”

Texas Republican Kevin Brady said he had doubted that the deal would attract the support it did, but Mr. Trump had proved him wrong.

“I want to thank President Trump for bringing this trade agreement to reality,” he said. “He was convinced that we could rebuild bipartisan trade here in America by insisting on a fair and level playing field for American workers, and he was exactly right.”

During a break in debate, Robert Lighthizer, Mr. Trump’s trade chief, even hobnobbed with Mr. Neal in a Capitol hallway. “Thanks, Bob – great job,” Mr. Neal told him. “Congratulations,” Mr. Lighthizer replied.

Later during the vote, Mr. Lighthizer, sitting with his staff in the public gallery, blew kisses to Democrats on the floor of the chamber, mouthing “thank you” and placing his hand over his heart.

Only a handful of high-profile legislators opposed the agreement, including “the squad,” a group of four young left-wing Democrats: Alexandria Ocasio-Cortez, Ilhan Omar, Rashida Tlaib and Ayanna Pressley.

In a sign of how much both sides like the agreement, Mr. Trump even feuded with Speaker Nancy Pelosi over who could claim its passage as a victory.

“Of course we’ll take credit for it,” Ms. Pelosi told reporters. “We had an opportunity to do something very important for America’s people.”

Mr. Trump went after her on Twitter, claiming USMCA “has been sitting on Nancy Pelosi’s desk for 8 months, she doesn’t even know what it says.”

Overhauling or tearing up the North American free-trade agreement was one of Mr. Trump’s key election promises. He blamed the deal for sending manufacturing jobs to Mexico and allowing Canada to “take advantage” of the U.S.

The three countries spent more than a year negotiating, reaching a deal in September, 2018. USMCA preserved most of NAFTA but with a handful of protectionist changes, including more stringent rules on the auto industry meant to disadvantage Mexico. Canada also agreed to allow more American dairy into its protected market.

Democrats, however, demanded further changes in exchange for passing the deal.

After another round of negotiations, Mexico accepted tougher labour standards and a system for enforcing them, while the Trump administration agreed to put more than US$800-million over four years into implementing the new labour and environmental rules.

Mr. Trump also agreed to strip new rules protecting big pharmaceutical companies from competition by cheaper generics out of the deal – a key step for Democratic attempts to lower prescription-drug prices. In addition, he strengthened USMCA’s dispute-resolution system. Both of these were things Canada and Mexico had wanted in the initial talks but failed to get.

In a rare move, even major trade unions and the AFL-CIO, a labour umbrella group, endorsed the deal. Finishing negotiations earlier this month also allowed the Democrats to show that they were capable of passing major legislation even while pursuing impeachment.

Some business groups, however, withdrew their backing for the pact over the removal of pharmaceutical protections. And while most Senate Republicans have expressed support for passing the deal, some are opposed over its protectionist bent.

In an op-ed published in the Wall Street Journal Thursday, Pennsylvania Senator Pat Toomey said he would vote against ratification.

“I still believe free trade is far better for my constituents than restrictive, managed trade and hope USMCA’s protectionism doesn’t become the template for future trade agreements,” he wrote.

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