Moneybox

Democrats Did the Right Thing by Making a Deal on Trade

Nancy Pelosi, surrounded by other congressional leaders, speaks at a lectern.
Speaker of the House Nancy Pelosi and House Ways and Means Committee Chairman Richard Neal speak about the U.S.-Mexico-Canada Agreement, known as the USMCA.
Saul Loeb/Getty Images

After months of haggling over key details, House Democrats have officially agreed to back the White House’s updated trade deal with Mexico and Canada—and progressive commentators are furious. Some prominent voices are dismayed that Nancy Pelosi and her caucus have decided to hand Donald Trump a win on one of his signature policy issues, which might help his reelection chances. And they are appalled that lawmakers chose to announce this news on the very same day that they unveiled their articles of impeachment against the president, thus muddling their message. Some sample opinions:

It’s true that Democrats don’t deserve any style points for stomping all over their own news cycle. But based on the information available so far, they do seem to have negotiated a good trade pact that’s worth supporting, even if it might give the president something to brag about on the campaign trail.

Donald Trump ran for office in 2016 on a promise to tear up the old North American Free Trade Agreement—“the worst trade deal maybe ever signed anywhere,” as he put it during one debate—and replace it with something vastly better. But the changes included in the new and supposedly improved deal that the White House unveiled last year after months of chaotic bargaining turned out to be mostly incremental, and critics on the left dismissed the newly christened U.S.-Mexico-Canada Agreement as NAFTA 2.0, a lightweight rebranding effort that would do little good for American workers. While this might not have been entirely fair, major U.S. unions such as the AFL-CIO opposed the deal, arguing that its much touted new labor standards didn’t have teeth, and Democrats said that they wouldn’t support it without major changes.

Some of the biggest sticking points for American labor involved the rights of Mexican workers, who historically have lacked the ability to collectively bargain. Instead, they are generally represented by company-controlled unions that negotiate “protection contracts” within each factory, designed to keep wages low. This, according to many, has encouraged corporations to move manufacturing jobs from the U.S. to Mexico. “Protection contracts are at the heart of the pressure on factory wages in the U.S. and beyond,” Harley Shaiken, a labor professor at the University of California at Berkeley, told Bloomberg back in 2017. The fact that the original NAFTA did nothing about them has long been one of labor advocates’ absolute core complaints about the deal.

On paper, the USMCA the Trump administration revealed last year was designed to put an end to this state of affairs by requiring Mexico to grant workers the right to form legitimate, independent unions. And in May, the country passed legislation doing just that. The problem is that few Americans experts fully trust Mexico’s government to implement its own laws, and NAFTA—The Trump Remix lacked any serious mechanism for punishing it for failing to do so. Once negotiations got going in Congress, U.S. labor unions sought to insert stronger enforcement provisions into the deal. Among other things, they wanted inspectors to monitor Mexican factories for labor violations—an idea the country is, unsurprisingly, a bit cold on—and to make it easier for the U.S. to bring trade cases over them.

We still don’t have actual text of the new agreement, so all opinions about the deal are basically provisional. But the signs so far suggest that organized labor got a lot of what it wanted. The fact sheet that Democrats on the House Ways and Means Committee released outlining concessions it won from the White House features a number of new labor rules, including enforcement and monitoring. (The document doesn’t directly refer to “inspectors” but says the deal with establish “Labor Attachés that will be based in Mexico and will provide on-the-ground information about Mexico’s labor practices.”) Meanwhile, AFL-CIO president Richard Trumka, who had to bless the deal before Democrats would back it, is trumpeting the new changes.

Democrats seem to have secured other important concessions in the deal. The original USMCA was widely considered a giveaway to pharmaceutical companies because it guaranteed the makers of expensive biologic drugs 10 years of protection from cheaper competition. That provision, which could have made it harder for the U.S. to lower its own drug costs, is out. The new agreement also adds more enforcement on environmental rules. The deal isn’t perfect: Nancy Pelosi failed to remove protections for internet companies that could make it more difficult for the U.S. to amend its own laws. Also, at least one major union, the International Association of Machinists and Aerospace Workers, says it still opposes the revised deal, and others are still holding out for more details. But, at first glance, it looks like an improvement over both the original-recipe NAFTA and the first draft of the USMCA, and it could help set better standards for America’s future trade deals.

Does that mean Democrats should support it? A lot of vocal people on the left clearly think not, arguing that Trump is a uniquely lawless and dangerous president and that by working with him on a major priority, Democrats are normalizing him in the public’s eyes and muddying their message that he deserves to be removed from office. There is also the concern that Trump delivering on his promise to fix NAFTA could help him win reelection, subjecting the country to another four years in office.

It’s not obvious either of those points is true, though. Democrats have made it abundantly clear that they think Donald Trump is a bad president who ought to be sent packing from the Oval Office. I doubt a trade deal will significantly alter that perception among voters. It’s also not obvious that Democrats would benefit from turning down a deal that gives organized labor most of what it’s wanted for years. If they did, Trump would surely go around the country telling factory workers that Democrats had no intention of ever fixing NAFTA (and, given their track record on this issue, lots of workers would probably believe him). Perhaps Pelosi and Co. could have refused to negotiate with him in the first place, but that also would have opened them up to accusations of bad-faith stonewalling that might have cost them with moderates and factory workers alike.

Beyond all of that, does anybody really think that, after all the lunacy of the past three years, NAFTA is going to be what makes or breaks Trump’s reelection campaign?

At the moment, it seems like Democrats have succeeded in turning the USMCA from a so-so trade deal into a pretty good trade deal. Passing it, and trying to take credit for its positive qualities, is a reasonable course of action. Sometimes, it’s OK to let bad presidents do good things.