Editorial: Stop stalling on NAFTA replacement

Nolan Finley
The Detroit News
President Donald Trump, Canada's Prime Minister Justin Trudeau, right, and Mexico's President Enrique Pena Nieto participate in the USMCA signing ceremony, Nov. 30, 2018 in Buenos Aires, Argentina.

The trilateral pact negotiated to replace the North American Free Trade Agreement (NAFTA) was a gift to big labor, which generally sees trade deals as a threat to U.S. jobs. And yet unions are stalling the United States-Mexico-Canada Agreement (USMCA), and in the process keeping job creators in confusion about future trade policy.

The USMCA, finalized by the Trump administration last year, checks off a number of boxes on labor's wish list. It improves rules of origin, meaning that automobiles would have to contain a higher percentage of parts produced within the trading zone. The new standard is 75 percent, up from 62.5 percent.

It, for the first time, imposes a minimum wage on other countries — 40 percent of the parts in an automobile, for example, would have to be made by workers earning at least an average of $16 an hour.

It strengthens intellectual property protections. And it opens the Canadian dairy market to American farmers.

That's why Vice President Mike Pence was in Detroit Wednesday to advocate for its passage. 

The benefits for the United States are significant. The International Trade Commission released a report last week that predicts USMCA would add $68 billion to the U.S. economy and create 176,000 new jobs here. 

All that is well and good, AFL-CIO President Richard Trumka says, but the pact doesn't go far enough. He wants stiffer labor mandates on Mexico that would make it easier for workers in that country to organize unions.

Trumka's demands are a likely deal-breaker, since they would require Mexican companies to renegotiate 177,000 labor contracts. 

And even if Mexico agrees to his provisions, Trumka says he still may not support the pact because he doesn't trust the Mexicans to enforce them.

Democratic House Speaker Nancy Pelosi hasn't taken a position on USMCA, but without labor support she is refusing to bring it to a vote.

That's a destructive stance. The United States, and particularly the Detroit automakers, need a trade agreement in place. Without certainty about trade policy, manufacturers are reluctant to invest in new plants and products.

USMCA is also vital to maintaining America's trade leadership. China has been aggressively seeking deals with many of the United States' traditional trading partners, including Mexico. 

It also is in labor's interest to put the agreement in place. Until Congress signs off, the labor rights and environmental protections it includes will not kick in.

Mexico and Canada have have signaled they will ratify the pact. Here, it now awaits only Congress' approval.

If Democrats have genuine issues with USMCA that go beyond the partisan desire to deny Trump any victory, they should raise them on the House floor. The administration could return to the table with Canada and Mexico and ask for adjustments.

But this is a fair trade deal that shouldn't be derailed by politics or the unreasonable demands of labor officials who have already been given more than they could have hoped for in this new deal.