Reuters
- Congress on Tuesday reached an agreement with the White House on a rewrite of a 25-year-old trade pact with Mexico and Canada.
- The deal offers President Donald Trump and moderate Democrats a legislative win against the backdrop of a high-profile impeachment scandal.
- The breakthrough this week is likely to be welcomed by businesses and investors after months of heightened policy uncertainty.
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Congress on Tuesday reached an agreement with the White House on a rewrite of a 25-year-old trade pact with Mexico and Canada, offering President Donald Trump and moderate Democrats a legislative win against the backdrop of a high-profile impeachment scandal.
The US-Mexico-Canada Agreement was announced by the North American neighbors in late 2018, but the terms of it have been under negotiation on multiple fronts since then. The breakthrough this week is likely to be welcomed by businesses and investors after months of heightened policy uncertainty.
At a press conference announcing support for the deal, House Speaker Nancy Pelosi said Democrats were able to forge compromises with US Trade Representative Robert Lighthizer on labor, pharmaceutical and enforcement provisions.
“It is infinitely better than what was initially proposed by the administration,” Pelosi said.
Trump made a pledge to scrap the North American Free Trade Agreement a center of his campaign in 2016, calling it the “worst trade deal ever made.” He seized on the announcement early Tuesday, which came just an hour after House Democrats said they would move ahead with two articles of impeachment against him including abuse of his power in office and obstruction of Congress.
“America’s great USMCA Trade Bill is looking good,” the president wrote on Twitter. “It will be the best and most important trade deal ever made by the USA. Good for everybody – Farmers, Manufacturers, Energy, Unions – tremendous support. Importantly, we will finally end our Country’s worst Trade Deal, NAFTA!”
Lighthizer and Jared Kushner, Trump’s son-in-law and a senior White House adviser, are expected to make announcements on the agreement in Mexico City later Tuesday. Canadian Deputy Prime Minister Chrystia Freeland and Mexican Foreign Minister Marcelo Ebrard said they would attend that meeting.
The International Trade Commission concluded in an April report that the original USMCA would have a modest but positive effect on the US economy, mostly because of reduced policy uncertainty.
Gross domestic product by 0.35 percentage points over six years under the agreement, the ITC estimated. It could create roughly 30,000 auto industry jobs, but overall American car production and consumption would fall because of higher prices.
This story is developing. Please check back for updates.
