Passing USMCA by Thanksgiving would be a ‘linchpin’ for global trade, former Trump aide says

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Congress must approve the United States-Mexico-Canada (USMCA) trade agreement in order to provide a linchpin for global trade discussions, according to Rick Dearborn, the former White House deputy chief of staff for policy.

With fewer than 10 legislative days left until Thanksgiving, Dearborn, who now serves as executive director for the cross-party Pass USMCA Coalition, said that with impeachment proceedings likely to impact the schedule, the House was running out of time to pass the bipartisan legislation.

Republican lawmakers have been ramping up public pressure on Democratic House Speaker Nancy Pelosi to approve the deal, a replacement for NAFTA (North American Free Trade Agreement).

Democrats have been pushing for assurances from Mexico on labor reforms and enforcement, and U.S. Trade Representative Robert Lighthizer has been meeting frequently with Pelosi and the nine-member USMCA Working Group to iron out the fine print on the deal.

“I’m hearing really good news, good traction, the meetings have been going well, and the Mexican government has really leaned forward into this,” Dearborn, who left the Donald Trump administration in March 2018, told CNBC via telephone Wednesday, adding that he is optimistic that the deal will get over the line in the coming weeks.

House Ways and Means Committee Chairman Rep. Richard Neal, who heads up the USMCA Working Group, traveled to Ottawa on Wednesday to discuss lingering concerns with Canadian Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland.

Mexico has ratified the deal in congress, while Canada and the U.S. have yet to do so.

“I think USMCA is the linchpin to every other agreement that is going to come down the road,” Dearborn told CNBC.

“We get USMCA done, it makes it easier to not only finish this phase one on China, but then move forward on phase two. We’ve already moved forward on phase one with Japan, it helps us move forward on phase two with Japan.”

He added that passing the deal will enable the Office of the U.S. Trade Representative to turn some of its attention to potential U.S.-U.K. trade discussions, adding that further talks with the Philippines, Vietnam, Kenya and others could also move forward.

Playing politics

Vice President Mike Pence has recently appeared in 18 states, including a number of Democratic districts which voted for Trump, to criticize Democrats for not moving fast enough to get the USMCA to a vote.

Asked if such actions undermined the bipartisan spirit of efforts to ratify the deal, Dearborn said politics were being played “on both sides” but suggested the Democratic caucus was working “in good faith” with White House trade officials.

“I think that these freshmen members, especially in Trump districts, are going to need something beyond just investigations and oversight and impeachment to hang their hat on,” Dearborn said.

“(Pence) is probably picking districts that make sense because those are going to be districts that both Republicans and Democrats are going to be fighting over in 2020, but I’ll leave it to others to determine whether it’s counterproductive — I think he’s going out there trying to make the case.”

The passage of USMCA would likely be framed as a big bipartisan legislative win for both parties, as it enables the president to deliver on a key 2016 campaign promise while enacting the labor reform concessions insisted upon by Democratic leadership.

“I do think USMCA is the best example of a bipartisan effort with both sides really in earnest trying to get to a good conclusion, so I’m much more optimistic about this effort than I am other pieces of legislation that might be out there,” Dearborn added.

Former chairman of the House Democratic Caucus, Joe Crowley, who serves as honorary co-chairman of the Pass USMCA Coalition, said that there had been “tremendous advances” on the Mexican labor reforms and suggested that Democrats need to “take a victory and recognize the good work they have done.”

Crowley told CNBC via telephone Tuesday that the USMCA would be “critical” for the U.S. and global economy, and said its passage would demonstrate that Democrats “can lead and in effect do the people’s business despite the crisis that is facing the president.”

The House Intelligence Committee will next week hold its first open hearings as part of the impeachment inquiry into Trump’s conduct on Ukrainian foreign policy.

Crowley, who formerly served as House Representative for New York’s 14th district until losing a Democratic primary to Rep. Alexandria Ocasio-Cortez in 2018, said negotiators were still working toward final agreement on enforcement labor and environmental provisions.

“I think the Mexicans are trying to demonstrate that they are serious about the changes they have made and the implementation of their domestic legislation, in terms of allowing greater opportunities for organized labor to organize and to collectively bargain, and then that they enforce the laws that are in place,” Crowley said.

He predicted a “very strong chance” that the bill will move forward before Thanksgiving and commended Lighthizer for showing “tremendous patience” throughout negotiations.

“I think that we have been working to get this over the line despite what the president says — if it doesn’t happen, it wasn’t because Robert Lighthizer was shortcoming in terms of what he could do. He’s done a good job and I think Democrats recognize that as well.”

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