US House passes new deal replacing Nafta

Speaker of the House Nancy Pelosi with other Democratic lawmakers during a news conference on the US-Mexico-Canada Agreement, which will replace the 1994 North American Free Trade Agreement.
Speaker of the House Nancy Pelosi with other Democratic lawmakers during a news conference on the US-Mexico-Canada Agreement, which will replace the 1994 North American Free Trade Agreement.PHOTO: EPA-EFE

WASHINGTON • The US House of Representatives has overwhelmingly approved a new North American trade agreement that includes tougher labour and automotive content rules, but leaves US$1.2 trillion (S$1.6 trillion) in annual US-Mexico-Canada trade flows largely unchanged.

The House passed legislation to implement the United States-Mexico-Canada Agreement (USMCA) 385-41, with 38 Democrats, two Republicans and one independent member voting against.

The House vote on Thursday sends the measure to the Senate, but it is unclear when Senate Republican leader Mitch McConnell will take it up. He has said that a USMCA vote would likely follow the impeachment trial of President Donald Trump in the Senate that is expected next month.

The USMCA, first agreed upon in September last year, will replace the 1994 North American Free Trade Agreement (Nafta). Mr Trump had vowed to quit or renegotiate the Nafta, which he blames for the loss of thousands of US factories to low-wage Mexico.

House Speaker Nancy Pelosi gave the USMCA a green light last week after striking a deal with the Trump administration, Canada and Mexico to strengthen labour enforcement provisions and eliminate some drug patent protections.

US industry groups breathed a sigh of relief at the vote.

"This modernised trade deal between our North American trading partners will strengthen the US auto industry and the auto manufacturing supply chain," said Mr Matt Blunt, president of the American Automotive Policy Council, which represents Detroit carmakers Ford, General Motors and Fiat Chrysler.

The changes negotiated by the Democrats, which include modestly tighter environmental rules, will also set up a mechanism to quickly investigate labour rights abuses at Mexican factories.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 21, 2019, with the headline 'US House passes new deal replacing Nafta'. Print Edition | Subscribe