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Is Democrats' USMCA Trade Deal With Trump a Big Win or 'Major Strategic Misstep?'

While some labor unions and economists said the trade pact represents a meaningful improvement, others worried the deal hands Trump a victory while doing little if anything for working people and the planet.

House Speaker Nancy Pelosi (D-Calif.) and House Ways and Means Committee Chairman Richard Neal (D-Mass.) speak about the U.S.-Mexico-Canada Agreement, known as the USMCA, on Capitol Hill in Washington, D.C. on December 10, 2019. (Photo: Saul Loeb/AFP via Getty Images)

Is it a major win for workers, or an "economic nothingburger" that could have a devastating impact on the environment?

Is it a shrewd political move by House Speaker Nancy Pelosi (D-Calif.), or a massive strategic blunder that hands President Donald Trump a victory at the worst possible time?

The deal this week between House Democrats and the Trump White House on the proposed U.S.–Mexico-Canada Agreement (USMCA) was met with mixed reactions from organized labor, environmentalists, and progressive political commentators, with some hailing the trade pact as a necessary upgrade from the status quo and others condemning it as an all-around disaster.

"The USMCA is nothing more than a NAFTA 2.0 and it spells disaster for food safety, air and water quality, and climate change in America."
—Wenonah Hauter, Food & Water Action

Pelosi, flanked by a group of House Democrats, announced the agreement on Tuesday, just minutes after the Speaker joined Reps. Jerry Nadler (D-N.Y.) and Adam Schiff (D-Calif.) in unveiling two articles of impeachment that charge Trump with abuse of power and obstruction of Congress.

AFL-CIO president Richard Trumka, who was closely involved with the USMCA negotiations, immediately endorsed the pact as a "vast improvement" over the North American Free Trade Agreement (NAFTA), which caused deep harm to U.S., Canadian, and Mexican workers while undermining key environmental and consumer protections.

"Make no mistake, we demanded a trade deal that benefits workers and fought every single day to negotiate that deal; and now we have secured an agreement that working people can proudly support," said Trumka. "The USMCA is far from perfect... But there is no denying that the trade rules in America will now be fairer because of our hard work and perseverance."

The Economic Policy Institute (EPI), a left-leaning think tank aligned with labor interests, offered a slightly less positive assessment but ultimately concluded the deal is "better than the alternatives."

In a blog post Tuesday, EPI's Thea Lee and Robert Scott predicted the agreement—which has not yet been released in full—"will in no way offset or reverse the massive devastation caused by the original NAFTA."

"Despite these concerns, the USMCA may yield benefits for workers in a few industries, such as glass and steel. And it may result in significant improvements in labor rights for Mexican workers," Lee and Scott wrote. "At the end of the day, the USMCA is the best of a set of bad choices."

Green groups, meanwhile were even less impressed with the USMCA, which must be approved by Congress before it can be signed by Trump.

"The USMCA is nothing more than a NAFTA 2.0 and it spells disaster for food safety, air and water quality, and climate change in America," Wenonah Hauter, executive director of Food & Water Action, said in a statement Wednesday. "USMCA is not a trade deal, it is an attack on public health and the climate. Congress must reject USMCA or we'll be looking at a future of irreversible environmental disaster and unsafe food, water, and air... with no end in sight."

"If you are calling a president illegitimate and corrupt, you can't then give him the big wins that he will need when he goes into key states. He gets to brag about his victories."
—Rebecca Katz, progressive strategist

Dan West, a senior advocate for the Natural Resources Defense Council, echoed Hauter's assessment and said any passable trade agreement must include strong climate protections.

"While the details are still secret," West said, "all indications are that the revised NAFTA pact fails this key climate test, and we will be forced to oppose it."

According to Lori Wallach, director of Public Citizen's Global Trade Watch, while labor unions and consumer advocates won serious improvements in the deal that should not be understated, nobody should walk away thinking that Trump or the Democrats have achieved anything close to a progressive trade agreement with the USMCA.

In a detailed statement, Wallach said:

The best feature of the new NAFTA is the gutting of Investor-State Dispute Settlement (ISDS). Using this regime, corporations have extracted almost $400 million from North American taxpayers after attacks on environmental and health policies before tribunals of three corporate lawyers. That a U.S. pact largely eliminates extreme ISDS protections for foreign investors and anti-democratic tribunals sends a signal worldwide about the illegitimacy of the ISDS regime.

On the other hand, Wallach continued, "Trump's claim that this new NAFTA will bring back hundreds of thousands of manufacturing jobs is absurd."

Beyond the specific policy details of the USMCA, progressive observers expressed concerns about the political implications of handing Trump a victory with the 2020 general election less than a year away and as the impeachment process moves ahead.

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"It's bad policy and worse politics," said Adam Jentleson, public affairs director at advocacy group Democracy Forward.

Yvette Simpson, CEO of progressive organization Democracy for America, called the trade pact "a major strategic misstep" by the Democratic leadership.

"Swing district Democrats won't win a single new vote by agreeing to pass this trade deal," said Simpson. "Meanwhile, Donald Trump will be spending the next 11 months bragging about the trade agreement he 'alone' passed."

In an interview with The Hill, progressive strategist Rebecca Katz also worried that the deal will give Trump a political boost.

"If you are calling a president illegitimate and corrupt, you can't then give him the big wins that he will need when he goes into key states," Katz said. "He gets to brag about his victories."

Trump has already begun doing precisely that. Speaking to reporters on the South Lawn of the White House Tuesday, Trump called the USMCA "one of the greatest trade deals ever made for our country" and claimed Democrats only agreed to the deal because they are "embarrassed" by the impeachment process.

"I call that the 'silver lining' to impeachment. Because without the impeachment, they would have never approved it, in my opinion," Trump said. "And the reason is they wanted to muffle down the impeachment [is] because they're embarrassed by it, and they couldn't get the votes. And that's exactly what happened."

Trump repeated the claim during a campaign rally in Hershey, Pennsylvania on Tuesday:

Few lawmakers have spoken out in opposition to the agreement. Rep. Alexandria Ocasio-Cortez (D-N.Y.), one of the most outspoken progressives in Congress, told reporters Tuesday that she is "leaning no" on the sweeping trade pact.

"I do also represent a working-class district," Ocasio-Cortez said, "and I certainly believe that a Democratic president would negotiate a better deal."

Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), both leading contenders for the 2020 Democratic presidential nomination, are reportedly expected to oppose the agreement. The senators have been critical of the USMCA throughout the negotiation process, but neither has commented on the pact since the deal was announced Tuesday.

"The NAFTA treaty that Trump renegotiated with Mexico will still allow companies like General Motors to send our jobs to Mexico," Sanders said during a rally in Michigan in April.

In a speech last November at American University in Washington, Warren said "Trump's deal won't stop the serious and ongoing harm NAFTA causes American workers."

"It won't stop outsourcing, it won't raise wages, and it won't create jobs," Warren added. "It's NAFTA 2.0."

In her assessment, Wallach said a key takeaway from the USMCA negotiations is that progressive concerns can no longer be ignored after years of corporate domination of trade talks.

But, she said, simply making NAFTA better is a low bar and "not the same as negotiating a truly progressive trade agreement from scratch."

USMCA, she concluded, "is not the template for future agreements, but establishes the floor from which we will continue to advocate for a new model of trade and globalization that puts people and the planet first."

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