Congressional action on the United States-Mexico-Canada trade pact to replace the NAFTA agreement will depend on whether the Trump administration offers House Democrats changes that will achieve “substantial and real” improvements to the agreement, a trade working group said in a report to Speaker Nancy Pelosi.

“It is time for the administration to present its proposals and to show its commitment to passing the new NAFTA and delivering on its own promises,” the group of Democrats wrote.

The group, headed by Ways and Means Chairman Richard E. Neal, D-Massachusetts, finished its fourth meeting with Trade Representative Robert Lighthizer on Friday and summarized in a report meetings and takeaways from a July 18-22 trip to Mexico. Four group members and six other lawmakers spoke with Mexican workers and officials about enforcement of labor and environmental provisions in the proposed agreement.

[Administration puts House on notice for a pre-August NAFTA vote]

The working group met with Lighthizer over several weeks to discuss concerns about language in the USMCA agreement about a 10-year monopoly on pricing of biologic drugs, labor rules, environmental rules and overall enforcement of all parts of the trade pact. The USMCA will replace the North American Free Trade Agreement, long decried by Democrats and President Donald Trump as a trade deal that sent thousands of manufacturing jobs to lower-wage factories in Mexico.  

The report says President Andres Manuel Lopez Obrador’s government has the political will to carry out labor reforms that include opening 700,000 company union contracts over four years and allowing workers to choose independent unions to bargain for them. But the working group questioned whether Mexico will have the money for enforcement as Lopez Obrador pursues an austerity budget.

The nine-member working group will send text to the Trade Representative’s Office next week with “the concrete and detailed proposals we have made,” the report said. Group members as well as the Ways and Means trade staff will continue work with Lighthizer’s agency throughout the August recess. Neal and Earl Blumenauer, chairman of the Ways and Means Trade Subcommittee, also have directed committee staff to continue work on a draft implementing bill for the USMCA.

“The Ways and Means Committee will have responsibility in the end for massaging the agreement but I do think it’s been helpful to have people who are not necessarily on the committee. Everybody would agree there’s been a sincere earnest effort that’s being made to hear the concerns of a representative part of the Democratic caucus on this agreement,” Neal told reporters.

Lighthizer may have earned the administration greater credibility on enforcement with the announcement Friday that his agency had directed the U.S. Customs and Border Protection to block certain timber imports considered illegal under the U.S.-Peru trade agreement. Democrats have cited past administrations’ reluctance to enforce the agreement’s logging provisions as an example of a lack of will by the U.S. to take environmental trade provisions seriously.

Blumenauer and working group member Jimmy Gomez, D-California, seemed upbeat Friday after meeting with Lighthizer.

“There’s a lot of agreement that enforceability is a big component of getting this right. There’s definitely agreement that enforceability, monitoring are big issues. It was the best meeting yet,” Gomez said.

The group raised concerns that USMCA provisions do not clearly end the practice of a government blocking the appointment of arbitrators to state-to-state dispute panels.

In a briefing with reporters, Blumenauer said the group and Lighthizer had made significant progress since June. The goal now is to turn the discussions into something concrete, he said. 

“We all have our marching orders over the course of the next six weeks and a commitment to come back when everybody is assembled in town (in September) to deal with the work product that’s going to be the result of more hard thinking and some exchanges this summer,” he said.

Blumenauer said Democrats are still looking at making changes to the main USMCA text in order to address their concerns.

He said trade agreements approved by Congress over the last 20 years “have been reopened, very surgically and specifically.”

Blumenauer also said the implementing legislation needed to move USMCA through Congress could be an additional vehicle for steps Democrats believe must be taken for the agreement to win significant bipartisan support. 

“Almost without exception, people are looking at things that would permit moving forward,” he said, noting that Democrats are interested in improving NAFTA.

During the briefing, Blumenauer floated the idea of enforcing Mexican labor reforms by tying a firm’s benefits such as lower tariffs under USMCA to its compliance with new Mexican labor requirements.

[jwp-video n=”1″]