The enactment of the U.S.-Mexico-Canada Agreement would increase revenues by $230 million a year in 2023 and $360 million a year in 2024, the Congressional Budget Office estimates. CBO projects that “certain imports of motor vehicles and parts” that currently enter the U.S. duty free under NAFTA would not be eligible under the stricter rules of origin in USMCA. It expects that some of those parts or vehicles would be replaced by domestic production, but some would be replaced by imports subject to tariffs, and thus, total customs revenue would rise. While there would be hundreds of millions spent in the first three years, primarily for monitoring environmental and labor compliance in Mexico, by 2024, that spending would be just $21 million, and would be partially offset by lower subsidies to dairy farmers, since CBO assumes they would have higher sales as a result of the deal.
The end-of-the-year appropriations compromise worked out between the House and Senate will add tens of millions of dollars for trade enforcement and port technology. The bill, which is expected to pass the Senate by Dec. 20 and has already passed the House of Representatives, will also spend $54 million for the Office of the U.S. Trade Representative.
Seven freshmen in the House -- all from traditionally Republican districts -- say that it's wrong for Senate Majority Leader Mitch McConnell to put off a vote on the U.S.-Mexico-Canada Agreement when he's complained for months that House Democrats are delaying a vote. “We are deeply concerned by your statements that the Senate will not take up the USMCA this year and that you refuse to pass any legislative items during January -- including the USMCA,” they wrote. They said the USMCA cannot end up in the Senate's “legislative graveyard,” as hundreds of other House-passed bills have. The letter, sent Dec. 17, was led by Rep. Cindy Axne, D-Iowa, and joined by Reps. Abby Finkenauer, D-Iowa; Joe Cunningham, D-S.C.; Angie Craig, D-Minn.; Anthony Brindisi, D-N.Y.; Kendra Horn, D-Okla.; and Susan Wild, D-Pa.
A bipartisan resolution supporting the administration's desire to get reforms to the World Trade Organization, but also urging that the Geneva delegation work with other countries, passed the House Ways and Means Committee on Dec. 17. Rep. Ron Kind, D-Wis., a leader on free trade in the Democratic caucus, co-authored the bill. He told fellow committee members that he is talking to the Senate to see if they will raise a similar resolution.
The House of Representatives passed the Safe Sleep for Babies Act of 2019, H.R. 3172, by voice vote on Dec. 16 (see 1907170046). The legislation followed a Washington Post investigation into why the Consumer Product Safety Commission didn't follow up on deaths of infants in inclined sleepers.
Sen. Ron Wyden of Oregon, the senior Democrat on the Finance Committee, and Sen. Sherrod Brown, an Ohio Democrat who voted against NAFTA, have endorsed the NAFTA rewrite, known as the U.S.-Mexico-Canada Agreement. The two had said they would oppose the USMCA unless it included a labor enforcement mechanism that carried consequences for Mexican imports from factories that weren't honoring workers' rights.
Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, said that despite lots of negotiating -- even through the last several weekends -- Democrats and Republicans are not finding a compromise on bringing back expired temporary tax provisions or renewing tax provisions that are due to end this year, such as the Craft Beer Modernization Act. With regard to the provisions that expire this year, like the one for beer, wine and spirits, Brady said he does not expect them to survive “if these discussions fall through.” That said, if there is a way to find a compromise, there are a few items that have wide appeal, and the Craft Beer excise tax break is “a high priority for both parties,” he said at a press conference Dec. 11.
House Democrats and the Office of the U.S. Trade Representative say that the new NAFTA can serve as a template for future trade deals, but experts question how that might come to pass, and a key Republican wants at least one Republican priority restored in future deals.
The House of Representatives passed H.R. 4761, a bill that requires CBP to certify that its chemical screening devices can identify synthetic narcotics, like fentanyl, at low purity levels. The bill passed the evening of Dec. 9 on a vote of 393-1. Rep. Clay Higgins, R-La., was the lead on the bipartisan bill. There is no Senate companion bill yet.
Even though the Democrats won some changes to the new NAFTA that are seen as contrary to business interests -- primarily, removing extended patent protection for pharmaceuticals in Canada and Mexico -- business groups celebrated House Speaker Nancy Pelosi's decision to hold a vote on the trade pact. A vote in the House is expected next week, but a Senate vote won't come until next year.