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Trump’s USMCA Seen as Model for Easing Partisan War Over Trade

Bloomberg logo Bloomberg 12/21/2019 Justin Sink and Shawn Donnan
a train driving down the street: A southbound CSX Corp. auto rack freight train travels down Main Street in La Grange, Kentucky, U.S., on Thursday, Oct. 1, 2015. CSX Corp. is scheduled to release quarterly earnings results on October 13. © Photographer: Bloomberg/Bloomberg A southbound CSX Corp. auto rack freight train travels down Main Street in La Grange, Kentucky, U.S., on Thursday, Oct. 1, 2015. CSX Corp. is scheduled to release quarterly earnings results on October 13.

(Bloomberg) -- President Donald Trump’s top trade negotiator and senior Democrats have declared that with House passage of a rewrite of Nafta, they’ve found a formula for Republicans and Democrats to forge trade deals despite Washington’s deep partisan divide.

The U.S.-Mexico-Canada Agreement passed the House in a bipartisan vote Thursday after starting as a partisan fight between Trump, who has sought to make trade a centerpiece of his presidency, and Democrats who raised alarm about protections for workers and the environment.

Read more: New Nafta Leaves Winners and Losers Across North America

It’s not clear if the dynamic can be replicated in other trade deals. There are other reasons the agreement, known as the USMCA, may have won bipartisan support: unusual political conditions ahead of 2020 elections, long-standing ties between Robert Lighthizer, Trump’s trade czar, and key Democrats, and an intensive campaign by the White House to pressure to vulnerable Democrats in swing districts.

a train driving down the street: A southbound CSX Corp. auto rack freight train travels down Main Street in La Grange, Kentucky, U.S., on Thursday, Oct. 1, 2015. CSX Corp. is scheduled to release quarterly earnings results on October 13. © Photographer: Bloomberg/Bloomberg A southbound CSX Corp. auto rack freight train travels down Main Street in La Grange, Kentucky, U.S., on Thursday, Oct. 1, 2015. CSX Corp. is scheduled to release quarterly earnings results on October 13.

But with the USMCA, bipartisan support began to take shape after Lighthizer, the administration’s key architect in winning its passage, worked with Democrats to address their concerns. Those efforts culminated with both parties claiming victory in a 385-41 House vote that marked an end to decades of Democratic opposition to trade deals.

“You can have a permanent trade policy if you get the balance right,” Lighthizer said in an interview. “If you get the balance right, you can get Republicans and Democrats on board.”

Trump -- who simultaneously was pushing for a trade deal with China -- repeatedly sought to demonize Democrats who stood in the way of passage with routine attacks on Twitter.

Changing Direction

Despite the public friction, even labor leaders such as the AFL-CIO’s Richard Trumka, who worked closely with Lighthizer, see the USMCA as providing a path to future trade agreements.

“Most of these people made a career out of opposing Nafta,” Lighthizer said of the Democrats. “We figured out a way to come together and we’ve done something that will change the direction of the policy.”

House Speaker Nancy Pelosi also said the USMCA can be viewed as “a template for future trade agreements.” But she told reporters that some Democrats are more cautious and want to see how it’s implemented before reaching that conclusion.

Even as the White House celebrates House passage, the trade deal still must clear the Senate, where Majority Leader Mitch McConnell has refused to set a timetable. Senate Finance Committee Chairman Chuck Grassley said his panel will take up the pact on Jan. 7.

Some Senate Republicans have raised concerns about concessions to Democrats. While the agreement is still seen as likely to pass the GOP-majority Senate -- particularly as Trump pressures members of his own party -- the vote will provide a clue about whether fault lines over trade policy have been reset.

Grassroots Pressure

Lighthizer and other White House officials cite their months-long effort to build grassroots pressure on reluctant Democratic and labor leaders as key to House passage.

The trade chief started meeting with Representative Rosa DeLauro, a longstanding Democratic opponent of trade agreements who he knew from his time as lawyer for the steel industry. He said he solicited her opinions shortly after the negotiations with Canada and Mexico began in August 2017.

In the end, DeLauro supported the measure, even though she said labor and environmental provisions could have been stronger and that it lacks needed climate standards.

“USMCA is not a model moving forward, but it establishes important principles we can build from,” she wrote this week in a letter to colleagues.

Lighthizer has worked with other Democrats who have taken a lead on trade issues, including Senator Sherrod Brown of Ohio. Brown has steadfastly opposed new trade deals over the past two decades before backing USMCA.

Seeking Bipartisanship

Lighthizer’s stated goal from the beginning of negotiations in 2017 was to get a bipartisan vote. For the 71-year-old veteran of the Reagan administration who first emerged as a player in Washington as a Finance Committee aide to former Senator Bob Dole, the goal was part of what he sees as a project to remake American trade policy for the long term.

The White House sought to complement Lighthizer’s direct negotiations with a campaign that officials said they hoped would build Democratic support, increasing pressure on a reluctant Pelosi.

That effort included more than 50 one-on-one meetings with Democrats, according to White House officials. Administration staff also targeted members close to Pelosi -- like Representative Anna Eshoo, a California Democrat -- and attended meetings for different Democratic caucuses, including the moderate Blue Dogs, Congressional Hispanic Caucus, Progressive Democrats and freshmen members.

The White House sought to prime lawmakers for those meetings by having local government leaders and businesses call offices to express their support for USMCA, officials said. White House officials presented tailored presentations on how the trade deal would impact workers in individual members’ districts.

Among Lighthizer’s other targets were Trumka and other labor leaders who had opposed North American Free Trade Agreement and enforced a hard-line stance on trade within the Democratic party that undermined former President Barack Obama efforts to reach trade deals.

The USMCA came at a unique time on the Democratic side. Some party lawmakers -- dubbed “do-nothing Democrats” by Trump -- said they felt pressure to pass the trade deal to refute allegations they were solely focused on impeaching Trump. The House voted Wednesday to send articles of impeachment to the Senate.

Swaying Moderates

The administration worked behind the scenes to keep the deal from becoming a focus in the Democratic presidential primary, out of concern opposition could sway Pelosi. White House officials said they pushed moderate Democrats to publicly endorse the deal before presidential candidates had a chance to weigh in.

Lighthizer held out until the very end on his biggest concession -- dropping a 10-year exclusivity period for new biologics, a protection the pharmaceuticals industry had been demanding. Administration officials said they knew early on that they’d have to give in as Democrats linked the issue to high U.S. drug prices.

But Lighthizer told Democrats that the condition of the concession would be that they had to fight for support for the USMCA within their caucus.

It remains to be seen whether the protectionist approach adopted by Lighthizer -- and his willingness to broker deals with Democrats -- will take hold in a post-Trump Republican party.

“There are an awful lot of Republicans who held their noses and their beliefs to vote for this because Trump wanted it,” said Edward Alden, a longtime observer of trade politics at the Council on Foreign Relations.

Bill Reinsch, a veteran of Capitol Hill trade politics now at the Center for Strategic and International Studies, said it’s too early to claim a permanent ceasefire in trade politics.

“That’s always the problem with trade agreements,” he said. “It’s never going to be perfect for everyone’s perspective.”

--With assistance from Erik Wasson.

To contact the reporters on this story: Justin Sink in Washington at jsink1@bloomberg.net;Shawn Donnan in Washington at sdonnan@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Justin Blum, Ana Monteiro

For more articles like this, please visit us at bloomberg.com

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