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A gathering crisis: Washington must make a decision

Eric Farnsworth | Vice President, Council of the Americas, Washington D.C. Office
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Washington faces a gathering crisis and must soon decide: whether to take concrete steps, on a bipartisan basis, to hold leaders accountable and promote the general welfare of U.S. citizens. Time is growing increasingly short, and fundamental U.S. principles and future governance are at stake even as the calendar turns toward the electoral season in 2020.

It’s time to pass USMCA.

You see what I did there?

Trade is never an easy sell in Washington. It should be, because of its undeniable benefits to the American people on economic, social, political, and strategic terms. But powerful interests conspire to promote parochial benefits at the expense of the general welfare. Trade legislation is, in some ways, the ultimate exercise of power politics.

Simply put, passing trade agreements requires presidential leadership. To combat parochial political and economic interests, presidents have had to build support at the macro level while horse-trading at the micro level to get the required number of congressional votes for passage. There is nobody else with the stature or standing to be able to perform this essential role. This pattern always holds, and USMCA is no different.

The U.S.-Mexico-Canada Agreement is designed to replace NAFTA with updated and expanded provisions taking into account changes in the North American economy since 1994. Entire product categories that did not even exist 25 years ago, such as digital trade, are now pillars of the North American economy, yet lie outside the provisions of NAFTA.  Others, including energy, which were intentionally left out of the original agreement, have also been incorporated. Controversial provisions on labor and the environment, government procurement, and investment protections have been reformulated and updated to take account of evolving public mores. And a built-in review of the agreement has been established, ensuring a full evaluation of whether the provisions in the new USMCA are performing to expectations.

For free trade purists, USMCA is no doubt imperfect. The question, however, is whether USMCA is better than no agreement at all, which is the alternative that President Donald Trump repeatedly emphasizes. Passage of the new agreement would also presumably largely remove NAFTA as a catch-all political rallying cry against economic stagnation, social hopelessness, and national ruin, although trade and globalization broadly will continue to animate a large percentage of the U.S. voting public no matter what eventually happens to NAFTA and USMCA.

More to the point, while the United States, Mexico, and Canada have agreed to a text, and indeed Mexico has already ratified the agreement, Democrats in Congress and the Trump White House have yet to agree on their own set of requirements before legislation is submitted to Congress. And time is beginning to get perilously short, given the presidential primary season that begins early in 2020 and the limited number of work days between now and then. Of course, President Trump has also threatened to abrogate U.S. involvement in NAFTA as a means to spur action on USMCA, an act that would lead to chaos between the United States and a top partner not just on trade but also security issues. It is difficult to envision a mistake of greater strategic trade or hemispheric significance than the unilateral abrogation of NAFTA with nothing in its place.

To discourage this from happening, the agreement would need to be adopted by Congress and sent to the president by the end of this calendar year. It’s ambitious but doable, so long as the president himself exercises the sort of leadership required to find the 218 votes or more that will be required to pass the House of Representatives. Some Democrats appear to be reluctant to give the president a “win,” particularly in this super-charged political atmosphere. Others will not vote in favor of any trade agreement with Mexico. Still others will only agree with certain fixes. It’s messy, and it’s democracy, the worst form of government except all others, according to Winston Churchill. And it requires the Chief Executive to throw his political weight and prestige behind the process to facilitate an endgame, not relying solely on his advisors. 

The window for meaningful near-term action on USMCA is surely closing. If ever there was a time to find a way to work across the aisle in the national interest, despite obvious, bitter political differences and distractions between Congress and the White House, that time is now. Will Washington respond? 

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