Senate panel passes new North American trade deal, moving it closer to ratification

Key Points
  • The Senate Finance Committee passes the United States-Mexico-Canada Agreement. 
  • The full Senate could take up the replacement for the North American Free Trade Agreement later this month, and the House has already approved it. 
  • The deal can take effect once all three countries ratify it. 
Ranking member Sen. Ron Wyden, D-Ore., left, speaks with chairman Sen. Chuck Grassley, R-Iowa, during the Senate Finance Committee hearing on "The United States-Mexico-Canada Agreement" on Tuesday, July 30, 2019.
Bill Clark | CQ Roll Call | Getty Images

The Senate Finance Committee approved a new North American trade deal on Tuesday, moving it one step closer to ratification in the United States.

In a 25-3 vote, the panel sent the United States-Mexico-Canada Agreement to the full Senate, which could pass the pact this month. The House approved the accord last month in a bipartisan vote.

USMCA backers, led by President Donald Trump, have called the deal a long-needed overhaul of the 1994 North American Free Trade Agreement. The new pact makes several changes to protect auto industry workers, increases access to Canadian dairy markets for U.S. farmers and updates digital trade rules.

"USMCA will bring much needed certainty and real benefits to America's farmers, workers and businesses," Finance Committee Chairman Sen. Chuck Grassley, R-Iowa, said Tuesday at the start of the bill markup.

Businesses have sought stability as Trump stirs up trade conflicts with China and other major economic partners. The president has made replacing NAFTA and cracking down on Beijing's trade abuses a priority in his first term in the White House and used tariffs as a negotiating tool around the world.

How the USMCA trade deal delivers some big wins for the US tech industry
How the USMCA trade deal delivers some big wins for the US tech industry

House Democrats worked with the Trump administration for more than a year to secure tweaks to boost enforcement of labor and environmental standards. The changes got most of the party, including a trade deal skeptic in Senate Finance Committee ranking member Sen. Ron Wyden, D-Ore., on board with the deal.

Most Democrats in Congress and major labor organizations such as the AFL-CIO support USMCA. But a handful of House Democrats and labor unions oppose it, arguing it did not go far enough to stop outsourcing of U.S. jobs.

Three Senate Finance Committee members voted against reporting the bill favorably Tuesday. They were Sens. Pat Toomey, R-Pa., Sheldon Whitehouse, D-R.I., and Bill Cassidy, R-La.

Toomey has said USMCA as revised will hamper free trade. Whitehouse, meanwhile, contends it does not take enough steps to address the climate crisis.

The agreement has also split up the 2020 Democratic presidential field. Former Vice President Joe Biden backs it. While Sen. Elizabeth Warren, D-Mass., has indicated she will support the deal revised to include Democratic changes, Sen. Bernie Sanders, I-Vt., has opposed the pact.

Mexico has ratified the trade agreement. Canada may not approve it until later this month. The agreement does not take effect until all three nations ratify it.

The U.S. exports more goods to Canada and Mexico than any other countries.

Trump's impeachment could complicate the Senate's efforts to pass the deal. After House Speaker Nancy Pelosi sends House-passed articles of impeachment to the Senate, the chamber will start a trial on whether to remove him from office.

The speaker has not pushed impeachment to the other side of the Capitol as Democrats pressure Senate Majority Leader Mitch McConnell to call witnesses. Without a trial, the Senate has more flexibility to quickly pass USMCA.

"If it can be brought up before the impeachment vote, it'd be very important to get this — the sooner it gets done, for the good of the economy, the better," Grassley told reporters after the committee voted for USMCA. He noted that impeachment would have to take priority over other matters if it comes before the Senate.

Speaking at the start of the bill markup Tuesday, Wyden said the Senate should take both trade and impeachment seriously in the coming weeks.

"The new NAFTA agreement must not be used as a convenient excuse to shut down any other business before the Senate," he said.

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