Oct 3, 2018

Trump's trade agreement isn't a done deal yet

Trump announces the new trade deal on Monday. Photo: Chip Somodevilla/Getty Images

While reaching an agreement with Mexico and Canada on an updated trade deal is a major win for the administration, that's just the beginning of the battle, which now heads to Congress and will likely stretch into next year.

The big picture: Forget about Congress approving this before the midterms. Passing major legislation is tricky even in less partisan times. But because of all the steps required, the push to implement the new trade deal will likely continue into the new Congress when the fate of the deal could easily be up to a Speaker Nancy Pelosi.

"I think it stretches into the next Congress ... There’s still some deadlines in place. They gotta sign the deal, and I don’t think we’ll be voting on it in Congress until next year."
— Sen. John Thune, a member of the GOP leadership

The details: Trade Promotion Authority, or TPA, sets a strict process outlining what happens next for the U.S.-Mexico-Canada Agreement:

  • 60 days after the trade agreement is released, Trump can sign it — so Nov. 30, in this case.
  • Within 60 days after Trump signs the trade agreement, a list of required changes in law is due. Within 105 days after the agreement is signed, an International Trade Commission report on the economic impact of the deal is due. These clocks can run concurrently.
  • After these are released, the administration can send implementing language to Congress, which starts the congressional process. There's no deadline to send it — the administration generally submits the legislation when it has the congressional votes to pass it.
  • Congress has a maximum of 90 legislative days to consider and implement the trade deal. That means passing implementation legislation, which needs to receive a simple majority in each chamber.
  • Congress can't amend the legislation, which means members are largely stuck — for better or worse — with the deal announced early this week. However, it can influence the drafting of implementation language. It can also use procedural levers to avoid voting on deals it doesn't like.

What we're watching: Leadership's main job is now to corral the votes for the deal. When it comes to trade, the differences between states and districts are vast, meaning that there are going to be a ton of stakeholders for members to consider, and each member will have unique considerations.

An early signal came from Sen. Ron Wyden, ranking member of the Finance Committee, who's making it clear that enforcement of trade policies will be a big deal.

  • "The overwhelming area of concern is enforcement of the trade laws, and whether these are different and really have teeth," he said. “I want to see a plan."

The bottom line: While Democrats' statements on the deal have so far been mild (a lot of "reviewing"), there will be plenty of political pressure against giving Trump any kind of win next year.

  • "I think the administration is hopeful that some of the things they’ve done are favorable to some of the Democrat constituencies, that they might get some Democrats to vote for it. But I’ll believe it when I see it," said Thune.

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