President Trump’s biggest trade achievement went into effect Wednesday as the U.S.-Mexico-Canada Agreement replaced NAFTA, with administration officials saying it highlights the president’s commitment to saving American jobs.
Mr. Trump is touting the law as part of his promises made, promises kept campaign, and as a way to draw a contrast with presumed Democratic presidential nominee Joseph R. Biden, who voted for NAFTA as a trade-friendly member of the Senate.
The president on Wednesday called it “the largest, fairest and most balanced trade agreement ever negotiated.” He said he will welcome Mexican President Andres Manuel Lopez Obrador to the White House next Wednesday to mark the agreement and discuss other issues.
“It is a tremendous victory for our manufacturers and autoworkers, meaning more cars and trucks will be produced in the United States,” Mr. Trump said.
The president also attacked Mr. Biden on Wednesday for saying he plans to roll back most of the Trump tax cuts if elected, saying the action would “crash the market” and “kill jobs.”
“The people around him are radical left,” the president told Fox Business. “They’re going to raise taxes, they’re going to raise regulations and they’re going to put everyone out of business. It would be a disaster.”
In another move to bolster the economy, the president was meeting Wednesday night with Senate Majority Leader Mitch McConnell, Kentucky Republican, on the outlines of a “phase four” coronavirus relief bill. He said he favors another round of direct payments to Americans, larger than the maximum $6,000 per household that House Democrats have proposed in their $3 trillion package.
“I support actually larger numbers than the Democrats,” Mr. Trump said. But he sounded cool to an extension of $600-per-week unemployment benefits, saying “we want to create a very great incentive to work.”
U.S. Trade Representative Robert E. Lighthizer, who worked closely on the Mexico-Canada trade deal, said the agreement is even more important as the U.S. economy rebounds from the coronavirus pandemic.
“The recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States must stop the outsourcing of jobs and increase our manufacturing capacity and investment here at home,” he said. “With the USMCA’s entry into force, we take another giant step forward in reaching this goal and advancing President Trump’s vision for pro-worker trade policies.”
The new agreement includes stricter rules on reduced tariffs for autos and auto parts, a feature that the president says will bring manufacturing jobs back to the U.S.
Congressional Democrats, meanwhile, said they strengthened the law during negotiations with the White House by adding protections for workers.
“Mexican and U.S. workers will gain new tools to enforce fundamental worker rights — such as collective bargaining and the right to freely organize,” Rep. Rosa L. DeLauro said.
“However, for improvements on paper to translate into real gains for people, this administration must commit to enforcing the agreement to help workers, not corporate bottom lines,” the Connecticut Democrat said. “And, Mexico must fully and faithfully implement and enforce the commitments they made.
The enactment of the USMCA marks the culmination of events that started four years ago when Mr. Trump broke with traditional Republican orthodoxy on free trade during his 2016 presidential campaign, describing NAFTA as the worst trade deal in history.
The stance helped the New York real estate developer to connect with working-class voters across the Rust Belt who had come to blame the nation’s trade deals for shipping jobs overseas and hollowing out their communities.
It also put Democratic rival Hillary Clinton on the defensive.
Mr. Trump slammed her support, as first lady, of NAFTA, which her husband, President Bill Clinton, signed into law in December 1993. He also criticized her for backing normalized trade with China, while challenging her to disavow the Trans-Pacific Partnership trade deal, which the Obama-Biden White House promoted as a chance to strengthen the nation’s alliance with countries in Asia.
The message resonated, according to exit polls that found 42% of the electorate believed international trade took away jobs and that 62% of those voters backed Mr. Trump.
Mr. Biden has a similar record to Mrs. Clinton, and he faced criticism in the Democratic presidential primary race from Sen. Bernard Sanders of Vermont, who said the former Delaware senator’s votes have led to wage stagnation and the outsourcing of millions of jobs.
Mr. Biden said late last year that he supports the USMCA, but Mr. Trump and his allies say Mr. Biden did nothing to fix NAFTA when he had the chance.
“Joe Biden had a hand in nearly every bad trade deal over the last 40 years,” said Steve Guest, spokesman for the Republican National Committee. “It took a new kind of politician like President Trump to right the wrongs of politicians like Biden and pass a deal that would help create hundreds of thousands of jobs for America’s farmers, workers, and manufacturers.”
The RNC circulated video footage of Mr. Biden telling his colleagues on the Senate floor in 1993 that he found the arguments “for and against NAFTA are vastly, vastly, vastly overblown,” and that “I do not pretend to be an expert on international trade matters.”
Mr. Trump, meanwhile, has said the new law is a “colossal victory” for the nation, and that Canada and Mexico will no longer be able to take advantage of the United States.
“We got rid of the worst trade deal ever made in the history of mankind,” Mr. Trump said last week in Wisconsin.
The new deal modernizes trade in the digital era, prohibiting the three countries from imposing tariffs on digital products such as movies and streaming services.
The full economic impact of the agreement is expected to come gradually.
The U.S. International Trade Commission estimated last year that the deal will increase GDP by $68.2 billion (0.35%) and employment by 176,000 jobs (0.12%) over six years.
“The former NAFTA treaty was filled with holes and it caused a big increase in our deficits with our two big trading partners,” Commerce Secretary Wilbur L. Ross Jr. said Wednesday on Fox Business. “Since NAFTA, we have incurred more than $1 trillion of deficits with Mexico.”
He said the new agreement is “a very, very important thing, both for agricultural products and for manufactured products, especially automobiles.”
The trade milestone comes as a new poll shows Mr. Trump losing ground with voters on his handling of the economy, viewed as his strongest argument for reelection.
The CNBC/Change Research survey found that 55% of battleground voters (up from 53% two weeks ago) do not agree that “Donald Trump has done enough to help working Americans make it through the current economic downturn.”
In the poll, 48% of voters in six battleground states reported lost wages in their household as a result of COVID-19. More than 3 out of 4 voters, 77%, are still experiencing wage cuts.
And the poll found that 36% of battleground voters or someone in their household lost a job or was furloughed as a result of COVID-19.
Of those, 75% remain out of a job or furloughed.
Also, 54% of battleground voters say they are “more concerned that if we don’t extend the additional $600 a week in unemployment benefits that people who have lost jobs will fall further behind and the recession will get deeper.”
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