MNI POLICY: Overloaded Congress Won't Do USMCA, China This Yr

Former USTR Official Says Any China Deal Would Just Be A Ceasefire

By Brooke Migdon

     WASHINGTON (MNI) - Congress may be too preoccupied with President Donald

Trump's impeachment inquiry and preventing a government shutdown to ratify USMCA

or dig into any stopgap China agreement this year, former U.S. Trade

Representative Carla Anderson Hills told MNI. 

     With only a handful of legislative days left in 2019 Congress is

"overloaded" by impeachment hearings and other issues, she said in an interview.

On top of that the replacement to NAFTA is already bogged down by lingering

questions on labor rules and enforcement.

     Anderson Hills, the top U.S. negotiator of NAFTA, said some members of

Congress feel the pressure to squeeze ratification into what's left of the year

as House officials approach an election. Members of the House of Representatives

are elected every two years compared to Senators, who typically serve six-year

terms.  

     "Members of Congress would rather not have a contentious issue in a year

that they're running," she said. 

     The current trade ideology of some representatives may pivot depending on

what is more favorable in their home districts, she suggested. "You saw it in

the last election," she said, referring to Democratic candidate Hillary

Clinton's opposition to the Trans-Pacific Partnership -- a trade deal Clinton

called a "gold standard" during her tenure as Secretary of State under President

Barack Obama.

     What it comes down to, Anderson Hills said, is a simple question: "Are you

going to put politics over policy, or policy over politics?"

     Sen. Chuck Grassley (R-Iowa) said in a Senate speech in October he doubted

a vote on USMCA would happen this year. Many House Democrats are hesitant to

vote yes on the accord as it is, wanting greater enforcement provisions and

stronger labor and environmental protections. Those are the same concerns raised

by multiple Democrats during negotiations of the original NAFTA.

     Members of Congress are "going to have to scratch their heads" and parse

out their differences, Anderson Hills said, because NAFTA is 25 years old and

overdue for an update.

     Despite a long-standing stalemate, progress seems to have accelerated in

recent weeks. House Speaker Nancy Pelosi indicated Thursday USMCA could be

passed within the next few weeks. Larry Kudlow, a top economic advisor to the

White House, said Friday he was "optimistic" that the deal could be passed this

fall. In October, he said he expected USMCA to pass before Congress returns home

for the Thanksgiving holiday.

     Mexico has already ratified USMCA, and Canadian leaders earlier this month

affirmed they will only finalize the deal in tandem with Congress. 

     As USMCA moves along, a "Phase One" deal with China is also in the works.

But the deal is not expected to address contentious issues such as China's

alleged intellectual property theft or forced technology transfer. China has

also said the U.S. must drop its tariffs in exchange for a full deal, something

Trump was unwilling to give in other negotiations.

     Anderson Hills said the upcoming China deal should be seen as more of a

temporary ceasefire than a complete agreement. Enforcement and follow-through

will be critical in setting the tone for future negotiations even with potential

Chinese legislation to protect the intellectual property rights of foreign

businesses, she said. 

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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