Why Democrats might be gearing up to reject Trump's new NAFTA deal
Democrats just won control of the House of Representatives for the first time in eight years. But soon after the next U.S. Congress begins, that victory will face the party with a tough question: What to do with President Trump's revamped North American Free Trade Agreement?
On the one hand, signing off on the new deal — renamed the U.S.-Mexico-Canada Agreement (USMCA) for Trumpian branding purposes — will bring at least some positive change to trade between America, Canada, and Mexico. It seems like something Democrats could get behind given their reputation as the pro-worker party. But at the same time, the deal's improvements don't necessarily go far enough. Plus, passing the new deal would hand Trump a political win.
Let's take those problems in order.
Trump's revamped USMCA is a small step in the right direction. It includes rules that would push to keep more car manufacturing in North America. It would prod Mexico to improve labor standards and union rights, and to manufacture at least 30 percent of its cars using workers who are paid $16 an hour. (It will rise to 40 percent by 2023.) It would also largely roll back NAFTA's investor-state dispute settlement provision, which basically allows corporations to sue governments if policy choices happen to impinge on profits or investment opportunities.
Those are real improvements. But are they enough?
Prominent Democrats in both chambers are skeptical. The improvements to labor conditions in Mexico — which also aim to prevent U.S. corporations from shifting jobs south — may not actually be enforced. "Without enforcement you don't have anything," Rep. Nancy Pelosi (D-Cali.), the presumptive House Speaker for the next Congress, recently said. "Without it, you are, shall we say, just rebranding NAFTA."
Labor groups, while generally in favor of reforming trade deals like NAFTA, have also been reticent to give Trump's deal their unalloyed blessing. United Steelworkers Union President Leo Gerard, who's also chairman of the U.S. trade representative's labor advisory council, took issue with the $16-an-hour rule because it's an average, not a minimum, and it's not indexed to rise with inflation. Meanwhile, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) said it has "serious doubts that the improved rules will make a meaningful difference to North American working families without additional provisions."
On top of all that, those investor-state dispute settlement provisions I mentioned before — which, as The Economist puts it, "let multinational companies get rich at the expense of ordinary people" — are being preserved in the USMCA for the energy and telecom sectors specifically. How Trumpian!
All of this has progressive policy observers and environmental groups concerned. And no one is thrilled that the deal avoided a resolution to the fight over Trump's steel and aluminum tariffs.
The deeper problem here is the president himself.
Yes, Trump is ideologically mercurial, and he can sound supportive of traditional liberal goals like protecting Social Security, big infrastructure investment projects, and international trade reform. But while it would be nice to address every issue individually, politics doesn't actually work that way. These issues cannot be siloed; they're all connected.
So a win for Trump on trade will empower him to press forward on a host of other issues where his values most definitely do not align with progressives and liberals. Trump has spent the last two years governing as a pretty unapologetic white nationalist reactionary. He's beefed up America's already cruelly draconian immigration policy, at one point ripping families apart at the border. He happily stokes racial resentment, flirts with endorsing political violence, and plays nice with authoritarians and ethnonationalists. He lies incessantly.
This dilemma also came up when Trump first took office, and Democrats were trying to decide if they ought to compromise with the president on infrastructure. "Supporting a Trump-branded infrastructure initiative as a discrete piece of policy where two sides can find common ground only bolsters a white-nationalist politics, even if you oppose the rest of Trump's agenda," Slate's Jamelle Bouie pointed out at the time. "It legitimizes and gives fuel to white tribalism as a political strategy."
Political capital is fungible from issue to issue. A bipartisan win on trade reform would build up Trump's political capital as much as a bipartisan win on infrastructure.
How are Democrats to navigate this?
They could just pass the USMCA with a minimal amount of fuss, taking its modest wins while eating the downsides of compromise. Given how debatable the improvements in this deal actually are, it might not amount to much for Trump's political status with voters. But it's a risk.
They could also reject the whole thing on procedural grounds. The fast-track law under which Trump negotiated the USMCA has some rules of the road, and Democrats already complained that the White House didn't live up to its obligation to keep them informed. But that could make Democrats look nihilistic and petty.
The third option is to demand that the White House reopen negotiations. That also risks killing the whole thing, as Mexico and Canada would probably balk at any further demands. But at least Democrats would be killing the deal on point of genuine principle. Meanwhile, if the gambit worked, it could allow the Democrats to put enough of their own mark on the deal to deny Trump clear-cut political credit.
That third choice strikes me as the best way to walk the line: It neither gives into raw nihilism nor accommodates Trump's poisonous politics. But I don't envy the Democrats who will actually have to make the call.