The balance of power has shifted in Washington. After last month?s mid-term elections, the Democrats will take control of the House of Representatives in January. This could throw a monkey wrench into the process of ratifying the United States ? Mexico ? Canada Agreement (USMCA). The trade deal, which was signed in Buenos Aires, must be ratified by the legislative bodies of all three countries. The agreement was reached when the Republicans had control of both chambers of Congress.
House Democratic Leader and front-runner to be Speaker of the House, Nancy Pelosi, has made comments which could mean an uncertain future for the trade pact to replace the 23-year-old North American Free Trade Agreement (NAFTA).
In a statement, Pelosi revealed she had what she calls a ?constructive conversation?, with U.S. Trade Representative Robert Lighthizer. Pelosi says the deal has some good points. Her concerns lie with what she calls, ?a list without real enforcement of the labor and environmental positions.?
This could set up a showdown between the House of Representatives and the White House. With Democrats in control of the House, Republican President Trump may be forced into a position to negotiate more with his opposition, if he expects support for any of his measures. However, the President has also talked about pulling the U.S. out of the NAFTA agreement. This could put the pressure on the House Democrats to negotiate as well. Pulling out of NAFTA with no replacement treaty brings our trade agreements back to pre-1995. This is something neither side wants to see and could easily be the start of fodder for the 2020 campaigns.
