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President Donald Trump said this week that his replacement of the North American Free Trade Agreement "is one of the most important trade agreements you will see."
But that did not stop American builders, producers, retailers and workers' groups from voicing their concerns this week during the first hearing since the signing of the agreement, known as the States agreement. United States-Mexico-Canada, or USMCA, in September.
The two-day hearing in Washington before the International Trade Commission provided a roadmap for issues that could hinder the deal when Congress will consider it early in the year. next. Although legislators can not propose a complete rewrite, they can make changes to the wording of the bill – or delay voting until parallel agreements are reached between countries on thorny issues.
There is no deadline for ratification, but lawmakers are likely to wait to vote before the ITC releases its report on the economic impact. The commission has up to 105 days after signing, or mid-March, to submit its report to Congress.
Here are five things that could cause Trump headaches:
Cars
The USMCA reinforces the rules applicable to the manufacture of cars and trucks. To stay duty free, the USMCA increases the parts of a vehicle to be manufactured in the United States, Canada or Mexico. It also adds a salary stipulation, requiring that some of the coins be made by workers earning at least $ 16 at the hour.
Some representatives of the automotive industry said that it would be complicated and expensive to comply with these new rules. But former Republican Missouri president Matt Blunt, who represents the big three automakers – Fiat Chrysler, GM and Ford – has called the new rules "feasible". In general, the group is optimistic, it is optimistic that the USMCA "helps maintain the competitiveness" of the industry.
Blunt said he thought the new content rules would bring more investment to the US in the long run, but added, "We do not see any immediate impact."
The idea is that the content restrictions will bring the manufacturing sector back to North America and that the wage increase in Mexico will put upward pressure on the US and Canada. Mexico is also committed to recognizing the right of workers to collective bargaining.
But some Democrats, as well as American trade union groups, are skeptical about the significant impact of these provisions on workers.
"If the commission simply assumes that the words on the page are enough to transform Mexico's repressive labor regime, it will be a serious mistake," Celeste Drake, a specialist in trade and globalization policy, said Thursday. ; AFL-CIO.
"Nothing in the text would limit the current unrestricted discretion to ignore gross labor violations," she added.
The union, as well as the Teamsters who traditionally oppose free trade agreements, have not yet taken a final position on the USMCA, pending an analysis. further and from the ITC report. Their support could be essential to getting enough Democratic votes.
Strawberries
Florida and Georgia fruit and vegetable growers are unhappy that the USMCA is doing nothing to protect them from cheaper products from Mexico. Much of what is grown in the southeastern United States, including strawberries, blueberries, tomatoes and peppers, is grown on the other side of the border in the same seasons.
"Unfortunately, the NAFTA business environment and the one that will be created under the USMCA are anything but fair terms for Florida producers," said Adam Putnam, Commissioner of the United States. state agriculture.
He and other industry representatives said low labor costs and government subsidies allowed Mexican producers to sell fruits and vegetables in the United States at a price. less than the cost of production. Imports have increased since the entry into force of the original NAFTA.
Kenneth Parker, executive director of the Florida Strawberry Growers Association, said that the USMCA would be "devastating" for Florida producers.
The trade deal "is jeopardizing the economic livelihoods of Florida strawberry producers and their communities," Parker said.
Beer cans
Trump 's tariffs on imports of steel and aluminum were the elephant in the room during the two – day hearing. The USMCA will not lift these rights for Canada or Mexico, and many groups – from car manufacturers to breweries – have said that tariffs could nullify the benefits generated by the new trade deal.
Beer Institute chairman Jim McGreevy, a former governor of New Jersey, said more than 60 percent of the beer made in the United States was packaged in aluminum cans and that the prices were driving up costs. The USMCA, he said, does not include any provisions that could affect the beer trade, but tariffs should have been addressed in the negotiations.
The tariffs, which Trump imposed to protect the domestic steel and aluminum industries in the interest of national security, are a separate issue and may be waived by the administration. outside the trade agreement. But the issue could be addressed in the agreement, or Congress could wait for USMCA approval until tariffs are eliminated.
"Exempting Mexico and Canada from section 232 tariffs on steel and aluminum strengthens the agreement and will in turn strengthen the US manufacturing base," said Ann Wilson, who represents the Motor and Equipment Manufacturers Association.
US steel producers have benefited from rates, but Heidi Brock, CEO of the Aluminum Association, said this was not the case for its members. The majority of aluminum jobs in the United States are not in primary production, but in manufacturers who import metal from foreign countries. She said that there was a problem with subsidized aluminum from China, but that tariffs on Canadian and Mexican aluminum should be lifted.
The rates "will hinder the continued growth and investment of our industry here at home," Brock said.
Pockets
Yes, pockets. The garment and textile sectors both benefited from NAFTA and said they could support a large part of its replacement. But they disagree on a provision that garment makers say could make it more difficult to manufacture in North America.
The USMCA requires that made-up garments use more fabrics made in North America in order to benefit from commercial benefits. He specifically mentions sewing thread, pocket cloth and narrow elastic bands.
These restrictions "will make the use of the deal more expensive and complicated for US brands and retailers," said Julia Hughes, president of the United States Fashion Industry Association.
"We are concerned that some companies are moving their operations out of the Western Hemisphere or are choosing not to transfer new orders to Canada or Mexico because of this increased cost," she added.
This requirement is welcomed by the textile industry. Augustine Tantillo, president of the National Council of Textile Organizations, said North American factories could meet demand and help US producers.
But Rick Helfenbein, president of the American Apparel and Footwear Association, is not sure that the change of supplier would be easy.
The new restriction "could result in less use, not more – of US content in North American supply chains," he said.
Prescription Drugs
The pressure group on generic drugs and a group focused on improving innovation and access to new medical technologies expressed serious concerns about the USMCA on Friday.
The most controversial is a provision that will provide for a 10 year marketing exclusivity period for the original drugs.
"In its current form, the USMCA will reduce competition for some drugs and will drive an increase in the price of prescription drugs for Americans," said Jeffrey Francer, General Counsel of the Association for Accessible Medications.
In a recent letter to US Trade Representative Robert Lighthizer, the group was joined by AARP, the Blue Cross Blue Shield Association and more than 20 other groups opposed to the deal.
But the brand drug The lobby group Pharmaceutical Research and Manufacturers of America supports the agreement, particularly for its intellectual property protections that "will pave the way for the next generation of treatments and treatments," according to a statement released in October.
