Jenny Leonard of Inside US Trade reports the following statements by U.S. Trade Representative Robert Lighthizer after the NAFTA press conference earlier this week:
U.S. Trade Representative Robert Lighthizer on Tuesday said he was seeking to shake up the congressional voting landscape for free trade deals, suggesting a retooled NAFTA could be a “historic agreement” backed by both the business community and labor unions -- as well as their champions on Capitol Hill.
“I think in the final analysis business is going to support it, if we do it well. In the final analysis we can get labor to support it; if we do that then we’re in a whole new ballgame now and going forward,” Lighthizer said after a contentious fourth round of NAFTA talks, which ended in a decision to delay the next discussions. “I think there are ways to do that, have it be something that’s balanced and really, in my judgment, at least more market-oriented.”
Lighthizer said he hoped to “get back to the days where there was a substantial majority of people in both parties that voted for these trade agreements,” adding “that is my objective right now. I want to have a huge number of Republicans and a huge number of Democrats.”
A broadly bipartisan deal would be “truly be a historic agreement and it could be really a paradigm change in terms of the way the Congress reacts to trade and that’s really what my objective is at this point,” he said.
...
... Lighthizer, in his post-round briefing to reporters, acknowledged that for observers who have followed previous trade negotiations and their fate on Capitol Hill, his vision was “pretty unlikely.”
“But,” he said, “I think it’s important for the trading system that we end up re-establishing a solid majority for the kinds of things we’re doing. And that we not keep operating right on the fringe.”
First of all, I like the optimism here. We should aim for a broad popular and political consensus in favor of trade liberalization and trade agreements, and I'm glad this is Lighthizer's goal.
At the same time, an observer of the Trump administration might point out that some of the recent U.S. proposals seem designed to destroy trade agreements, not generate support for them. Well, there is that. However, there's always a lot of negotiating bluster, and not all of it will be carried through, so maybe we are getting too worked up about some of this. What if the Trump folks did something like the following in the NAFTA renegotiation:
-- They back off their "sunset clause" proposal, under which the agreement would expire after 5 years unless all parties decide to stay in. Periodic recurring votes on trade agreements sound like a political nightmare, especially if applied to every trade agreement. Maybe instead there could just be a more general review of trade agreements every few years, without a vote on staying in/pulling out.
-- They stick with their ISDS pullback (an opt-in, plus exclusion of MST and indirect expropriation). Maybe this, combined with tougher labor standards, would be enough to bring some liberal trade critics on board. (And on the other side, would anyone in Congress really care about losing ISDS? I know the business community insists they want it, but I see this issue as different than IP, where specific industries really depend on it, and I'm not sure how strong the ISDS support really is.)
-- They continue with their pullback on procurement liberalization, but to a lesser degree than currently proposed. I would hate this, as would the free trade supporters in Congress, but it could pull in a few more votes from trade critics. If I can survive with anti-dumping, I guess I can survive this.
-- They scale back their auto rules of origin proposal, which would likely cause job losses in the U.S. industry. Perhaps they could take out the U.S. content requirement demand (which establishes a really bad principle), and lower the regional content percentage.
-- They are able to convince Canada and Mexico to take out Chapter 19. That could help pull in a few of the sovereignty-focused conservatives, as well as shore up support from pro-trade remedies folks.
-- They accept Canada's proposed trade and gender chapter, which would make Canada happy, and give progressive U.S. law-makers something they hadn't even been asking for.
Think of all those elements -- or something roughly along these lines -- together. Is it possible that this package of changes could generate a comfortable political majority in support of a new NAFTA (and other trade agreements)? (Or is this take on the state of NAFTA far too optimistic, and I should adopt the pessimistic mood that many others have right now?)
