Members of Congress Visit Mexico on USMCA Concerns

Of the 10 Congress members who traveled to Mexico last weekend to evaluate the NAFTA rewrite as part of a congressional delegation, one was already planning to vote for the deal, others were leaning yes, and some others have always opposed free trade deals. For some of those who were leaning yes, their conversations with government officials and institutions that tackle environmental problems near the border moved them closer to voting yes. For others who were already skeptical, they returned even more skeptical.

Rep. Don Beyer, D-Va., said, “I thought it was the best CODEL I’ve ever been on.” He said Mexican Cabinet officials were “credible, committed, and honest about the lack of bureaucratic infrastructure. Or the funding necessarily.” He said he’s satisfied on labor, and even though he thinks it can’t all be done in a four-year timeline, Mexico is on the right path.

He supports more money for the North American Development Bank, saying its work tackling environmental degradation in Mexico is “very impressive.” With regard to biologics, he said, “I will go along with whatever Speaker [Nancy] Pelosi and the team are able to negotiate,” and said he believes Mexico would be “thrilled” if the exclusivity period is reduced to nine, eight, seven or six years.

If before the trip he wanted to “get to yes,” as Pelosi says, now, Beyer told International Trade Today: “I want to more than ever.” Beyer praised his colleague Rep. Rosa DeLauro, D-Conn., who also went to Mexico. “She’s been a leader of the opposition [to trade deals], and I thought it was really honest and brave of her to come.”

DeLauro issued a statement after the trip that focused on labor cases that are unresolved in Mexico and the fact that the budget for labor law implementation hasn’t been set. She said the government did not share “a clear strategy for dealing with legal challenges of those labor law reforms from protections unions.” She said the trip illustrated “the serious concerns I still have regarding President Trump’s deal.”

Rep. Judy Chu, D-Calif., who opposed the Trans-Pacific Partnership, also went on the trip. Before going to Mexico, “I questioned the enforceability of the labor provisions. I also wondered about the commitment of the Mexican government to changing the labor laws there. What I concluded after going there is that the commitment of the Mexican government is strong, and I was quite impressed by the words of the president,” she said.

But that doesn’t mean she’s more disposed to voting for ratification. “They want to change it but I don’t think they’ve thought the whole thing through. I just can’t see how they would achieve the end result. Certainly [not] within four years,” she said. “After talking to the workers and seeing what the actual situation is in regard to labor unions in Mexico, … I actually walked away more skeptical about USMCA,” the U.S.-Mexico-Canada Agreement that would replace NAFTA.

Chu learned during the trip that as part of passing NAFTA, the North American Development Bank was established, which surprised her; she hadn’t thought NAFTA had done anything for the environment. “There is not enough money in that bank. And I think that that bank needs to be strengthened. There are many positive things about that bank. There’s a dollar for dollar match — if the U.S. puts something in, Mexico puts in a dollar.” She said NAD Bank officials told them they could take care of problems around Tijuana with $230 million. “I was totally shocked by the pollution,” Chu told ITT, walking across her office to pull out her phone to show a picture of a rushing river heading to the Pacific Ocean. “One-third is sewage,” she said.

Chu rejected the idea that the environmental issues could be solved with an aid package alongside the implementing bill. “I think it just isn’t a matter of money, it’s a matter of directing where it goes.”

While most outside observers would say that California was one of the major winners from NAFTA, North Carolina had painful disruptions as textile mills and clothing factories shuttered once Mexican apparel could enter duty free.

Rep. George Holding, the only Republican on the trip to Mexico to learn about the new agreement, said, “NAFTA was tough on North Carolina, tough on textiles, it was very good for ag, sixty-two percent of turkeys go to Mexico.” Holding worked for former North Carolina Sen. Jesse Helms, who voted against NAFTA. But Holding said the textile industry in North Carolina has evolved, and no longer opposes trade agreements. Even before the trip, Holding said he was a proponent of USMCA. Holding spoke with ITT in his Washington office after returning.

“I think the Mexican government, from the president on down, had a very, very clear message. If you take that message to heart, I think no one could have sat through those meetings, as I did, and come away thinking there’s a better alternative to USMCA out there and attainable. We have the deal, and we need to ratify it.”

Rep. Ron Kind, D-Wis., a supporter of free trade, does think there’s a better alternative to USMCA. He said Mexico doesn’t want to reopen full-blown negotiations — and neither does he — but he said getting the deal through requires what Pelosi has called surgical changes. He described Mexico’s view of those sorts of changes: “As long as they’re reasonable and it doesn’t detract from what Mexico gains with the agreement, then why not?”

Kind said that as long as the Mexican budget — proposals are coming in September — has enough money dedicated to setting up the new labor court system, he is satisfied with the labor chapter in USMCA. He thinks that ratifying the deal gives the Mexican president more leverage in getting labor reform done, and he said the government is “committed to doing this and doing it well.”

On biologics, Kind said, “I don’t know if seven or eight or nine [years] is the right answer. Nonetheless, it’s a real obstacle that hopefully [U.S. Trade Representative] Bob Lighthizer is going to be creative about.”

Holding’s district has changed dramatically since 1994, as Raleigh and its suburbs have added many thousands of tech and pharmaceutical jobs. He said that of all the Republicans on the House Ways and Means Committee, he has the most pharmaceutical businesses in his district. “The data exclusivity is a compromise — I certainly argued for …12 years [of exclusivity] during our discussions on TPP. It wasn’t as prominent of an issue in USMCA but certainly I was arguing for as much data exclusivity as possible.”

Holding said others on the trip brought up the length of data exclusivity for biologics. “The consistent message from the president, through all of his ministers, was this was a hard-negotiated deal … and that they are satisfied with how the deal has come together. Obviously they passed it through their legislative body, and they don’t want to reopen it, and they’d like us to pass it as soon as possible.”

Holding said that in his view, even if there’s one provision you don’t like, you should look at the deal as a whole. So he said even if biologics exclusivity were reduced, he wouldn’t necessarily vote no. “The data exclusivity provisions are certainly very important to me but the USMCA overall is important as well,” he said.written by Mara Lee