Fight over Trump’s new NAFTA hits key stretch
Outside groups are boosting efforts to encourage lawmakers to pass President Trump’s revised North American trade deal ahead of a critical stretch this summer.
Getting approval for the United States-Mexico-Canada Agreement (USMCA) has been a top priority for K Street, and publicly those groups are expressing optimism.
Business groups have ramped up their lobbying, formed new coalitions and enlisted a number of prominent former lawmakers, including ex-Rep. Joseph Crowley (D-N.Y.) and former Sen. Heidi Heitkamp (D-N.D.), to push for passage.
But those efforts will be put to the test in the coming months, with advocates urging Congress to approve the deal by August in the face of strong doubts from both parties.
“The agreement is a huge win for America’s workers — and I’m confident that Speaker Pelosi will bring it to the floor in the not-too-distant future,” Rick Dearborn, founder of the Pass USMCA Coalition and Trump’s former deputy chief of staff, told The Hill.
But Alex Vogel, founder of The Vogel Group, isn’t as confident the USMCA can move through a Democratic-led House this Congress.
“The question to ask is whether the Speaker is willing to give [Trump] a win,” Vogel said.
Trump signed the deal to replace the North American Free Trade Agreement (NAFTA) in November, setting off a six-month timeline for Congress to take up the pact. Lawmakers, though, have yet to take the next steps to review the deal.
Democrats are pushing for tougher labor and environmental protections in the deal. During a meeting between President Trump, Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.), where the three agreed to work on a $2 trillion infrastructure deal, Schumer said Trump kept returning to the USMCA and asking what Democrats need to back the deal.
Vogel said that while the meeting made K Street hopeful that infrastructure could move, “I am not sure that bleeds over to USMCA.”
Top Trump economic adviser Larry Kudlow said last week that the White House would look at stronger enforcement measures to assuage Democrats, but it is unclear if the administration can implement those without reopening talks.
And there are also worries on the GOP side, where Senate Finance Committee Chairman Charles Grassley (R-Iowa) has warned the administration the deal is “dead” if Trump doesn’t lift his tariffs.
The trade fight has been center stage on K Street this year with new coalitions forming to push for the USMCA and businesses ramping up their lobbying.
In the first quarter of 2019, 723 clients lobbied on issues of tariffs, trade and related issues, according to the Center for Responsive Politics.
The Pass USMCA Coalition, made up of business, trade and advocacy groups, has been a prominent backer of the deal. The coalition has spent $30,000 in lobbying expenditures to the firm Cypress Advocacy, where Dearborn works. It has also aired TV and Facebook ads to push the new NAFTA.
And it includes some powerful stakeholders. Leading voices behind the coalition include the National Association of Manufacturers, PhRMA, Domino’s Pizza and AdvaMed.
The coalitions have also brought in a number of prominent former lawmakers to help sway the House majority. The Pass USMCA Coalition has Crowley and Gary Locke, the former Democratic governor of Washington and a onetime ambassador to China, as honorary co-chairmen. Former GOP Rep. Erik Paulsen of Minnesota was named the latest honorary co-chairman this week.
Former Sen. Blanche Lincoln (D-Ark.) has joined another group, Farmers for Free Trade, as a senior adviser and spokeswoman and has been taking an RV tour across the Midwest.
Heitkamp, who lost her reelection campaign in November, is a co-chairwoman of Trade Works for America alongside GOP operative Phil Cox.
Trade issues have also been a windfall for K Street, as companies hire firms to lobby for passage and to help get ahead of the deal’s many complicated changes.
Akin Gump was hired by Bayer Corporation, the Alliance of Automobile Manufacturers, Chevron and Pfizer, among others, to track USMCA in Congress. Capitol Counsel was hired by Chevron to monitor the USMCA and by Exxon Mobil to address issues in the deal.
Equinix hired K&L Gates to handle digital trade issues, while Mehlman Castagnetti Rosen & Thomas were hired by Walmart, the Business Roundtable and Procter & Gamble, among others, to work on the USMCA.
Those efforts will come to a head with supporters up against the clock.
Trade watchers say that if the deal is not passed by August, its path becomes even harder with the 2020 elections ahead.
Vogel expressed doubts that Pelosi would be willing to deliver a win to Trump that could mean bucking green groups and unions ahead of 2020.
“Even if it’s good policy and there is a ton of business effort behind getting it done, there is so much pressure from her caucus and messaging folks to deny him any victory that this will be harder than it should be,” Vogel told The Hill.
The other nations in the deal have also been raising pressure on Congress. Last week, Mexico’s Senate voted for an overhaul of their labor code, which Democrats said was a pre-condition for the USMCA.
Mexican Ambassador Martha Bárcena said Friday she is confident Mexico will enforce the new labor reforms. And Mexican Foreign Relations Undersecretary Jesús Seade met on Thursday with U.S. Trade Representative Robert Lighthizer to discuss the trade pact.
Vogel said the lobbying in support of the USMCA has helped.
But, he said, that impact may be undercut because “there is so much trade related advocacy going on right now — on tariffs generally and China stuff specifically.”
Groups are intensifying their efforts, though.
On Monday, a group of food and agriculture associations and companies wrote a letter to congressional leaders calling for USMCA’s approval. The letter backers included Bayer, the American Farm Bureau Federation, Cargill and the National Confectioners Association, among others.
The stakes are high for the deal’s proponents, who say they are ready for the fight.
“The American public understands the value of this deal — voters support USMCA by a 4-1 margin,” Dearborn told The Hill. “All of us remain optimistic that it’ll pass this year.”
This story was updated at 11:27 a.m.