WASHINGTON -- Representatives of the United States, Mexico and Canada on Tuesday agreed to amend a North American trade deal, accepting significant changes demanded by House Democrats on workers' rights, environmental protection and prescription drug prices.
The compromise all but guarantees that President Donald Trump will achieve one of his top priorities: a replacement for the 1994 North American Free Trade Agreement that he says stripped the industrial Midwest of millions of factory jobs.
At a signing ceremony in Mexico City's National Palace, U.S. Trade Representative Robert Lighthizer, Mexican Deputy Foreign Minister Jesus Seade and Canadian Deputy Prime Minister Chrystia Freeland endorsed revisions to the 2,000-plus page accord that they had produced one year ago.
"This is the best trade agreement in history," Lighthizer said. "It's something that's going to make North America richer. It's going to make America richer. It's going to make Canada richer, and it's going to make Mexico richer."
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The revised trade deal -- called the U.S.-Mexico-Canada Agreement -- would create new intellectual property protections, require that more North American parts be used in automobiles to qualify for zero tariffs, open the Canadian milk market to U.S. farmers and create new rules for e-commerce. It would also boost wages, benefits and safety rules for workers and put in place updated environmental protections.
The modified deal would add tougher measures to ensure that Mexican officials implement promised labor changes, such as recognizing the right of workers to form independent unions. The U.S. government would be able to crack down if Mexico doesn't comply.
"It's a rare thing that's a win for Trump and a win for Democrats," said Gregory Mastel, a senior trade adviser for the law firm Kelley Drye & Warren. "There aren't too many of those."
On Twitter, the president celebrated progress toward rewriting the rules governing more than $1.2 trillion in merchandise trade.
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"America's great USMCA Trade Bill is looking good. It will be the best and most important trade deal ever made by the USA. Good for everybody -- Farmers, Manufacturers, Energy, Unions -- tremendous support," Trump tweeted. "Importantly, we will finally end our Country's worst Trade Deal, NAFTA!"
NAFTA eliminated most tariffs and other trade barriers involving the United States, Mexico and Canada. Critics, including Trump, labor unions and many Democratic lawmakers, branded the pact a job killer for the United States because it encouraged factories to move south of the border, capitalize on low-wage Mexican workers and ship products back to the U.S. duty free.
The House is expected to vote next week on legislation to implement the deal, which also reflects the emergence of the digital economy in the quarter-century since NAFTA took effect. But the Senate will not take up the measure until after an expected impeachment trial early next year, said Senate Majority Leader Mitch McConnell, R-Ky.
Reflecting Republican concern over the concessions that Trump granted to win Democratic support, McConnell offered only a tepid endorsement.
"It's not as good as I had hoped," he told reporters. No. 2 Republican Sen. John Thune, R-S.D., offered a mixed assessment as well, saying the changes agreed to by House Speaker Nancy Pelosi and Lighthizer were "not favorable."
McConnell spoke shortly after House Democrats took credit for rewriting the deal.
"There is no question that this trade agreement is much better than NAFTA. It is infinitely better than what was initially proposed by the administration," said Pelosi, D-Calif. "We're declaring victory for the American worker."
Helping sway Democrats, the nation's largest labor federation backed the compromise.
"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 Richard Trumka, the president of the AFL-CIO.
The agreement is the first to contain "enforceable labor standards," which will include inspections of suspect manufacturing sites in Mexico, he said.
Getting Democrats and some of their labor allies on board marks a singular achievement for the president and, in the long run, may scramble the entrenched politics of trade. But the Democrats' public crowing sparked Republican concern that Trump had overpaid for Pelosi's support.
Sen. Patrick Toomey, R-Pa., an early critic of the NAFTA rewrite, criticized the removal of patent protections for a class of drugs called biologics as a "complete capitulation" to Democrats.
"It's clearly moved way to the left," Toomey said, "which is why you had a celebratory press conference by all the Democratic leadership in the House."
Mexico's Senate, which approved the new agreement in June, is expected to promptly ratify the amendments. Mexico is heavily dependent on trade with its northern neighbor -- about 80% of its exports go to the United States -- and the export sector has been one of the few bright spots in an economy that has flatlined this year.
The U.S. Chamber of Commerce and other business groups that have complained about fallout from Trump's trade war backed the compromise.
"It's good to get this thing finished and out of the way and not have uncertainty about our North American market," said Rufus Yerxa, head of the National Foreign Trade Council.
Democrats said they had secured specific changes in the text signed by Trump and the leaders of Mexico and Canada one year ago. The Democratic revisions eliminated a provision in the deal that would have granted biologics 10 years of protection from generic competitors, and added tougher environmental standards to the treaty.
Under the rewritten deal, if Mexico fails to hit specific targets in its labor reform program, U.S. enforcement actions will be triggered. New labor attaches will be dispatched to Mexico to monitor compliance.
The new enforcement mechanism also provides for "facility-based enforcement of labor obligations within a rapid time frame," according to a House Ways and Means Committee fact sheet. That was an apparent reference to factory inspections Democrats had sought, which would block goods produced in violation of agreed labor rules from entering the United States.
Pelosi conceded that she had failed to strip from the agreement legal protections for internet companies that absolve them of responsibility for user content published on their websites.
The speaker said her members raised the issue after she had already promised Lighthizer she would limit her requests to four subjects: labor, environment, biologics and enforcement.
"This negotiation has been an existential challenge for our country, and at times, an existential drama," said Freeland, who at times wore a T-shirt emblazoned with "Keep calm and negotiate NAFTA" during the trade talks. She said the agreement will be "profoundly beneficial" for Canadians.
Canada has said that it will ratify the trade pact "in tandem" with the United States.
Information for this article was contributed by David J. Lynch, Mary Beth Sheridan, Seung Min Kim and Amanda Colletta of The Washington Post; by Andrew Taylor of The Associated Press; and by Emily Cochrane and Ana Swanson of The New York Times.
A Section on 12/11/2019