Anyone who was worried that the impeachment inquiry would end up dooming “new” NAFTA (and the scare quotes are there for a reason) can rest easy.
The USMCA is all but done after months of behind-the-scenes wrangling between Bob Lighthizer, Richard Neal and, ultimately, Nancy Pelosi.
Donald Trump’s incessant allusions to “do nothing Democrats” aside, lawmakers have, in fact, been doing something when it comes to what would be the White House’s second signature legislative accomplishment (the other being the tax cuts, which handed a massive windfall to corporations, catalyzing a wave of buybacks and juicing bottom lines, while doing comparatively little for the middle-class, but we digress).
On Monday morning, the Washington Post cited AFL-CIO President Richard Trumka as indicating that there’s a deal in place and that he’s set to meet with his executive committee this afternoon to debate it.
“We have pushed them hard and have done quite well”, Trumka said in an e-mail to The Post, which notes that “support from the AFL-CIO, which opposes the existing North American Free Trade Agreement and blames it for destroying millions of good-paying manufacturing jobs, would likely ensure support from a majority of House Democrats if the deal is brought up for a vote”.
The Mexican peso rose, building on five days of gains, and strengthening through its 200-day moving average to the strongest since November 18.
Support from the union federation appears to mean Democrats have managed to secure better enforcement guarantees than what the original deal signed by Trump entailed. One trade lawyer told The Post that “The USMCA they signed in 2018 is not going to be the same as the USMCA we see in 2019”.
Pelosi declined to comment, but the pace of recent negotiations between the USTR and leaders from both Canada and Mexico suggested that all sides were pushing to get the deal across the finish line, despite “sticking points” tied to, among other things, steel and drugs (the legal kind).
“Congress is expected to approve the revised agreement with overwhelming Republican support in both chambers”, WaPo goes on to say, adding that Pelosi “has been working to secure a significant number of Democratic votes”.
“Now is the time to vote on it. I am optimistic we can reach a deal”, Andres Manuel Lopez Obrador said in a press conference Monday, imploring Democrats in the US to formally endorse the deal prior to 2020 in order to avoid getting tangled in the heat of the election campaign. Mexican lawmakers have created labor arbitration panels and it’s up to US and Canadian legislators to ratify the treaty, he said.
Now if only markets cared about this in the fog of the trade war with Beijing, we’d be all set to blow past multiple analysts’ year-end 2020 SPX targets in the space of two weeks.
