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House Demanding Changes to USMCA


Following the ratification of the USMCA by Mexico in June and impending action by the Parliament of Canada, it is now up to Congress to approve the USMCA.

According to House Speaker Nancy Pelosi (D-CA), Democratic members of the House are requesting greater protection for workers and provisions to reduce environmental impact. In addition, demands include stricter enforcement provisions and a reduction in the duration of the 10-year exclusivity for biologic drugs.

The USMCA as negotiated requires that 45 percent of automotive content be manufactured by workers earning at least $16 per hour. Without appropriate enforcement, cheap labor could be used in Mexico to the disadvantage of U.S. union workers. Representative Jan Schakowski (D-IL) noted “as long as the wages and rights of Mexican workers are suppressed, we are going to continue to see jobs in the U.S. outsourced to Mexico and other countries”.

The Speaker noted that “Changes could be made with surgical precision to facilitate passage of a resolution ratifying USMCA”. U.S. Trade Representative Robert Lighthizer has opined that it is now too late to reopen negotiations with both Mexico and Canada. Originally a mid-year deadline was set for ratification. Even if Canada takes positive action during the present month, it is doubtful whether USMCA will be approved by Congress before the August recess. Some legislators have suggested side agreements, but these are disfavored by Earl Blumenauer (D-OR), Chair of the Trade Subcommittee of the House Ways and Means Committee.

During the past week, Blumenauer addressing the Washington International Trade Association noted that the issues of protection for U.S. workers, enforcement and environmental issues would be required in order to receive support from the Democratic members of the House.

Richard Trumka, president of the AFL-CIO noted “The new NAFTA is not good enough yet and the Union will not support it until it is “worthy of the American people”.

As with the negotiations with China, Japan and the E.U., concessions will be required to conclude negotiations and adopt proposed trade pacts. The importance of trade agreements is denoted by the volume of agricultural commodities exported to NAFTA nations as documented in the monthly updates of export volume and value as posted in EGG-NEWS and CHICK-NEWS.