A day after the launch of the publicly televised portion of President Trump’s impeachment inquiry, House Speaker Nancy Pelosi noted the progress of the USMCA negotiations, signaling that the hearings aren’t distracting lawmakers from important government matters – especially those that impact the economy.
“We are moving positively in terms of the U.S. Mexico Canada agreement. Again, it all comes down to ...enforcement,” she said, “I do believe that if we can get this to the place it needs to be, which is imminent, that this can be a template for future trade agreements.”
Pelosi said she’d like to get the deal ratified before the end of the year, around the same time that Democrats hope to have Trump impeached.
Top of mind for business leaders and investors is the importance of getting the U.S. Mexico Canada agreement ratified as soon as possible. As many as 12 million American jobs are currently supported by trade between Mexico and the U.S. Mexico was the first country to ratify the agreement, Canada and the U.S. have yet to follow suit.
Pressure is mounting for Democrats who hope to ratify the deal this year because they’ve only got one month left to get it done. "Time is running out on the most important trade event of the Trump administration. It’s not the China saga, which will last beyond any ‘phase 1’ deal. It’s not this week’s forgotten call on auto trade with Europe. It remains the United States Mexico Canada Agreement (USMCA),” writes AEI resident fellow Derek Scissors. “Congressional recess for 2019 is one month away, meaning USMCA may be one month from death."
The Business Roundtable, which is made up of the CEOs of the country’s largest businesses, has said passing the USMCA this year would boost the U.S. economy and sustain job growth.
“USTR Lighthizer and House Democrats have made progress in recent weeks and it is likely in Democrats’ interest to prove that they can legislate during the impeachment process,” wrote Nomura analysts in a recent note about the impact of impeachment on the economy and markets.
Trump pressures ‘Nervous Nancy’
Trump has been pouring on the pressure this week regarding passage of USMCA.
“It's a great bill. USMCA -- I put pressure on the Democrats, there's tremendous pressure already, and most of them -- if you had a vote today, I think most of them would actually vote for it. But Nancy Pelosi, Nervous Nancy has to put it out there and sign. And if she doesn't, she's doing her party a tremendous disservice and she's doing this country a tremendous disservice,” Trump said at the Economic Club of NY on Tuesday.
Business groups have similarly talked up the importance of getting a deal done. JPMorgan Chase CEO Jamie Dimon spoke to Yahoo Finance back in June about the importance of the deal. “You know, the membership of the [Business Roundtable] wants that deal done. Mexico is a good neighbor of ours. Canada is a good neighbor of ours,” he said. “And we're going to be fully involved in trying to get every congressman to vote for USMCA.”
The global economic slowdown and the impact of the trade war with China has led to businesses pulling back on investments. This has had the effect of slowing down the U.S. economy’s growth from 3.1% in the first quarter to 1.9% in the third quarter.
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