There are two things that are remarkable about the push by Republicans to seize the political advantage on USMCA right now to anybody who has been tracking this...
The first is Donald Trump’s pivot on NAFTA 2.0, which the USMCA is. Anybody who has read the agreement and is familiar with what came before will tell you it is essentially a marriage of the old NAFTA and the Trans-Pacific Partnership, two trade agreements that Trump demonized.
There is one new addition: New rules of origin for autos that the best independent assessment of their impact found would result in higher costs for consumers, less vehicle production in North America and more imports from outside North America. See here: usitc.gov/publications/3…
The second thing that is remarkable is how Republicans who have watched Trump start trade wars and provoke China into retaliation against farm exports are now trying to shift the blame to Democrats for the drop in farm incomes in recent years.
The Trump administration has rolled out one of the biggest government bailouts in recent US history for the farm sector. bloomberg.com/news/articles/…
It also says it is paying for it with tariffs on imports from China. Which manufacturers say have been a tax increase on them. Some have taken a double hit - less demand for farm machinery as a result of the trade wars and higher costs due to tariffs. bloomberg.com/news/features/…
The Democrats now are doing what the Republicans did with the TPP and very Congress in history has done with trade agreements: Trying to squeeze more out of it in areas they care about. In the case of the USMCA that is largely about enforcement of labor provisions.
As Bob Lighthizer, Trump’s trade czar, will tell you the Democrats have actually been remarkably constructive in their engagement on USMCA. Which is why Trump and Republicans trying to use it as a political football may actually backfire...
Trying to shame Democrats for economic pain that is a direct result of the Trump administration’s actions on trade is brazen. And I suspect a lot of people in farm country see right through it...
