Finansnyheder

Trump v Trumka on trade as Nafta revamp stalls

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As Donald Trump pushes Congress to pass his trade deal with Canada and Mexico, he faces strong opposition from Richard Trumka, the head of the AFL-CIO labour federation.

Mr Trumka, the most powerful union boss in America, with 12.5m members across 55 unions, on Thursday warned the White House that any effort to force a vote on the USMCA would sink the deal.

Mr Trump wants to tout the agreement as a victory in his 2020 re-election campaign, after making repeal of the North American Free Trade Agreement core to his 2016 presidential run. Mr Trumka wants key provisions altered.

“Without the support of the labour movement in the US, Mexico and in Canada, the new Nafta will meet the same fate as TPP,” Mr Trumka said, referring to the Trans-Pacific Partnership trade agreement that President Barack Obama was unable to get Congress to support, and which Mr Trump abandoned shortly after taking office. 

Over the summer, Mr Trumka toured Ohio, Michigan and Pennsylvania — rust-belt swing states in 2020 — to persuade workers to reject the US-Mexico-Canada deal. 

“It’s really important for Congress to hear from you . . . When they hear from people back home, it is a big, big difference,” Mr Trumka told auto workers in Detroit. He urged workers to also use their “BS meters” to work out whether Democratic presidential contenders agreed that the USMCA deal needed to be improved. 

“If the meter goes off, or they give you that two-footed shuffle . . . find yourself another candidate,” he said.

The USMCA preserves the basic architecture of Nafta, including key updates compared to the 1994 pact on issues like digital trade,and reductions to some barriers to agricultural trade, such as some protections for Canadian dairy. However, it includes some stricter rules for tariff-free auto exports to the US from Canada and Mexico, including higher shares of North American content, and a higher wage requirement.

When Mr Trump signed the USMCA in November, the White House thought it would get quick approval given the lack of sympathy for Nafta among rank-and-file Democrats. Securing passage has proven tougher than expected. 

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Nancy Pelosi, the Democratic House Speaker, and Richard Neal, head of the House panel that oversees trade, have demanded changes to provisions on labour and environmental standards, and on the mechanism for enforcing the deal, before any vote. 

The Democratic leadership does face some resistance, however. While some Democrats want to avoid giving Mr Trump a victory ahead of the 2020 election, others say allowing a vote is important to help Democrats seeking re-election in conservative districts.

Former Mexican president Enrique Peña Nieto, left, US president Donald Trump and Canada’s prime minister Justin Trudeau at the USMCA signing ceremony in November in Buenos Aires, Argentina © AP

During his three-state swing, Mr Trumka said Ms Pelosi was in “lockstep” with the AFL-CIO about the need to fix the deal. Speaking at a Christian Science Monitor event on Thursday, he said she was doing a remarkable job of keeping together a very diverse caucus.

“The Democrats will stay in lockstep on trade, because it’s such an important issue for working people, and they represent working people,” Mr Trumka said. 

Robert Lighthizer, US trade representative, has held talks with Democrats to resolve the congressional impasse but there has been no breakthrough. Proponents of the USMCA in the business community have stepped up lobbying, arguing the agreement is an important upgrade to Nafta and will defuse Mr Trump’s threat to withdraw from Nafta entirely.

Edward Alden, a professor at Western Washington University specialising in US-Canada economic relations, said that while Mr Trumka was lobbying against the deal, some unions were “reasonably supportive” of the agreement. 

James Hoffa, head of the International Brotherhood of Teamsters, last month said the USMCA was an improvement over Nafta and would stop the “haemorrhaging of jobs” to Mexico. “We’ve got to get it right, make sure it’s enforceable, but we’ve got to pass it this year,” he told Fox Business Network.

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Mr Alden said the problem for Mr Trumka was “he can’t get out ahead of Pelosi and the Democrats”, adding: “If Pelosi wants to hold it up so as not to give Trump a win, the unions will stand behind her and say that the deal is just not good enough yet.” 

Mr Trumka said on Thursday that he “wants to get to yes” on the Nafta successor, but planned to head to Mexico next week to meet President Andrés Manuel López Obrador to discuss his concerns that Mexico does not have the ability to enforce key parts of the deal. 

The issue is likely to get more attention as the Democrats get closer to the presidential primaries in early 2020. Ms Pelosi is one of the few Democrats Mr Trump praises as being tough. But Mr Trumka likes to remind people that he is no lightweight.

During a stop in Pittsburgh, he urged workers to unite against the USCMA, telling them that Mr Obama had quipped after leaving office that his big mistake was underestimating the power of Mr Trumka and his members against TPP.

“I smile every time I think about it,” Mr Trumka told the Financial Times during a stop on his trade tour in Toledo, Ohio.

Follow Demetri Sevastopulo on Twitter: @dimi

Via Financial Times

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