Impeachment Derails Free Trade Agreement
By: Michelle Klieger
Tags: Trade, Politics, Trump, International Relations, Impeachment

Impeachment Derails Free Trade Agreement

Impeachment inquiry makes USMCA passage significantly harder, maybe impossible

On September 24, 2019, House Speaker Nancy Pelosi announced an official impeachment inquiry into President Donald Trump. The implications and unintended consequences for this decision cannot be overstated. This decision touches every aspect of the government, including international trade discussions. Concern is mounting that the United States-Mexico-Canada Agreement (USMCA) will be included in the pile of collateral damage. The deal already faced many challenges, now with an impeachment inquiry underway, the chances it gets derailed instead of ratified are growing.

USMCA is the trilateral trade agreement between the three North American nations, that replaces the North American Free Trade Agreement (NAFTA). The executive branches in each country finalized talks in 2018. The language was sent to the legislative branches for final approval. So far, Mexico ratified the agreement in June 2019. The ratification process in the United States and Canada is still ongoing.

USMCA Path Forward in the United States

For months, Vice President Mike Pence has crisscrossed the country gathering support for passing USMCA. Ratification ultimately hinges on Pelosi bringing it up for a vote in the House. She said she would schedule a vote after Democratic concerns with the agreement-enforcement, labor, prescription drugs, and environmental protections-are addressed. House Democrats formed four working groups to negotiate these issue areas with the administration.

During Pelosi’s impeachment inquiry press conference, she said, “we will move forward” with the trade deal. Passing USMCA in a Democrat-controlled House of Representatives is challenging. Democrats tend to be less supportive of free trade than their Republican counterparts. If the ratification vote falls too close to the 2020 elections, voting for USMCA could be a political liability for many incumbent Democrats. Therefore, Democrats may either vote against ratification or delay the vote until after the election. Meaning it’s now or never if the Democrats want to squeak by with enough votes.

Adding in Impeachment

The impeachment inquiry adds a lot of complexity. First, USMCA is an agreement that Trump crafted. For it to become law, he needs support from House Democrats, now a group of people with whom he doesn’t have the best relationship. These are the same people who are considering obstruction charges against him.

The specific problems that arise are:

Impeachment inquiry takes a lot of time. Representatives have limited time to tackle all legislative affairs. There may not be time to conduct a thorough impeachment investigation AND manage USMCA ratification. To pass USMCA, the White House may have to make concessions or changes in USMCA to appease the House Democrats. Why would the White House want to help the people leading the investigation? If USMCA passes, it may be the most significant international policy win of Trump’s presidency. Why would Democrats (who are trying to remove Trump from office) want to pass a trade agreement that could help Trump going into an election year?

Path Forward

Since the announcement of the impeachment inquiry, Pelosi has spoken positively about USMCA passage. However, Ranking Republicans Mitch McConnell and Kevin McCarthy are still concerned. They penned an Op-Ed in the Wall Street Journal pleading their case for USMCA ratification.

“The USMCA isn’t some political football. It’s a critical piece of economic policy. Its enactment or failure will have life-changing consequences for workers. Twelve million American jobs rely on trade with our northern and southern neighbors, according to the U.S. Chamber of Commerce. Mexico and Canada together represent a $500 billion export market for the U.S. They buy one-third of the goods America exports, plus tens of billions of dollars more in services.”

The trade setbacks during the last few years have largely outweighed the market access gains. USMCA could be the only trade bright spot in 2019, by modernizing the rules of trade between the United States and its two biggest trading partners. Now, the odds that the process gets derailed by politics seems increasingly likely.