Politics·Analysis

A senior Democrat comes to Ottawa to talk NAFTA. But what do Democrats want?

Proponents of the ratification of the revised North American trade agreement are hoping Richard Neal's trip to Ottawa on Wednesday was a sign Congressional Democrats and the Trump administration are close to a deal. But was the chair of the House ways and means committee coming to town to propose changes?

Ways and means committee chair Richard Neal met Trudeau briefly before talks with Freeland

House ways and means committee chairman Richard Neal, of Massachusetts, listens to a reporter's question as House Democrats arrive for a caucus meeting on Sept. 24 in Washington, D.C. (Alex Brandon/The Associated Press)

Proponents of the ratification of the revised North American trade agreement are hoping Richard Neal's visit to Ottawa today was a sign Congressional Democrats and the Trump administration are close to a deal.

But was it also a sign that Democrats now need something from Canada? If NAFTA changes weren't afoot, why would the chair of the House ways and means committee need face time with Canada's otherwise-busy-with-transitioning government?

While the cameras rolled at a morning courtesy call on the prime minister, Justin Trudeau said "it's a pleasure to see the positive momentum that seems to be happening" on the revised NAFTA's ratification.

"We want to see this implemented. Renewal is very important to the United States, and I can tell you with all certainty that Speaker [Nancy] Pelosi is committed to getting to yes," Neal said, before reporters were escorted out.

PM Justin Trudeau welcomes Richard E. Neal, Chairman of the Committee on Ways and Means, who is in Ottawa to try and get the CUSMA ratified. 1:30

From there, Neal and three other House representatives — two Democrats and one Republican — headed for talks with Foreign Affairs Minister Chrystia Freeland and other Canadian officials.

"We're excited to have this opportunity to talk to you about getting to ratification in both of our countries," Freeland said today.

"I particularly stressed the importance of meaningful enforcement mechanisms that ensure the protection of workers in all three nations and of our shared environment," Neal said in a written statement at the conclusion of the talks.

"I'm pleased that our neighbors to the north also have a strong desire for an agreement that benefits our economies while also lifting up our people."

Neal also visited Mexico City last month, where he met with President Andrés Manuel López Obrador.

Notwithstanding Washington's ongoing impeachment fight, House Speaker Pelosi has said Democrats are still open to voting on the new NAFTA before primary season takes over.

Notwithstanding Washington's ongoing impeachment fight, House Speaker Nancy Pelosi has said Democrats are still open to voting on the new NAFTA before primary season takes over. (The Associated Press)

U.S. Trade Representative Robert Lighthizer is trying to bridge their gaps, finalize an implementation bill and get the revised trade deal onto the floor.

But time's ticking down. Lighthizer and the Democrats may need a deal before U.S. Thanksgiving. That's just three weeks away.

The most influential union leader in the U.S., AFL-CIO president Richard Trumka, has warned it would be a "colossal mistake" to call a vote without addressing organized labour's concerns. Trumka met with Pelosi last week.

Can Mexico keep its word?

Democrats want guarantees that the deal's stronger labour and environment protections can be enforced. Some feared Mexico's budget lacked sufficient resources to implement its labour reforms.

To ease their concerns, López Obrador wrote a four-page letter to Neal last month, outlining what steps his government is taking on enforcement.

"Without some penalties, all the good work that has been done to try to raise labour standards, and make sure there's some minimum payment that auto workers will receive for the work they're doing, could all just be back to where things started," said Hassan Yussuff, president of the Canadian Labour Congress, who also served on Freeland's NAFTA advisory council.

Mexico's President Andrés Manuel López Obrador gives a speech to celebrate the one-year anniversary of his election in Mexico City's main square on July 1. (Fernando Llano/The Associated Press)

Canada proposed more robust labour language but the administration of U.S. President Donald Trump rejected it, Yussuff said. It's "quite ironic" to watch what's happening now to get the deal through Congress, he said.

One controversial proposal from Democrats Ron Wyden and Sherrod Brown is for a NAFTA inspection regime for Mexican facilities. But the prospect of American inspectors showing up to enforce Mexican labour reforms raised sovereignty concerns.

Mexico's approach to labour rights won't change overnight. By one count shared with Brian Kingston, the vice-president of the Business Council of Canada, there are 150,000 collective agreements in Mexico that are not based on legitimate collective bargaining with representative unions. They all may need updating, if not overhauling, to enshrine workers' rights.

"There's a huge amount of capacity-building that needs to occur, and Canada has some deep expertise there," Kingston said.

Last summer, Labour Minister Patti Hajdu travelled to Mexico City to announce a new bilateral working group to help implement Mexico's labour reforms.

But it's not clear exactly what kind of commitment that represents, financial or otherwise. Yussuff said the help Canada could provide remains "in flux, until a new cabinet is named."

It's also "up to the Mexicans to decide what help they need from us," Yussuff said.

A spokesperson for the Mexican Embassy told CBC News that it was not Mexico's understanding that Neal would be discussing specific financial assistance from Canada for the implementation of Mexican labour reforms.

Mexico also may need help raising its environmental standards.

Congressional Democrats like Oregon's Earl Blumenauer have suggested that Canada start contributing to the North American Development Bank, which improves environmental infrastructure on the U.S.–Mexico border.

Revisions, side letters coming?

Critics inside and outside Democratic circles also argue the new dispute resolution chapter doesn't fix a weakness of the existing NAFTA: a country's ability to block the formation of an arbitration panel when disagreements arise over compliance.

Tightening this requires either revising Chapter 31 of the new agreement, or adding a binding side letter between the three partners. (Some Democrats feel side letters aren't enforceable.)

Then there are the deal's unpopular pharmaceutical protections.

With voter anger over the high cost of drugs becoming an issue in next year's presidential election, Democrats don't want the new NAFTA to prevent a future administration from being able to dial back the data protections profitable pharmaceutical companies enjoy.

"There's no justification why that was done in the first place," Yussuff said. "I could understand the Democrats feeling very vulnerable. They've got to do something to recoup what the administration gave away [to pharmaceutical companies] in the negotiation."

Why would a Canadian government that's also focused on drug costs — and pondering a national pharmacare plan — stand in the way of that?

The Liberal government may have seen this coming when the last Parliament rose without passing the NAFTA implementation bill.

Change it or walk away?

Until now, Freeland has held firm: reopening the agreement could be a Pandora's box, she's said. A deal's a deal. No more concessions. 

It's a line meant to dampen expectations in Democratic circles that it's possible to rewrite Lighthizer's deal.

"I think that was the right message," particularly in the months leading up to Canada's election, Kingston said. "You don't want to give the impression that … we've reached this final solution and now suddenly we're going to start nibbling away at various pieces of it."

But what if what Neal's proposing doesn't hurt Canada, or even strengthens the deal?

"If they're coming to us with improvements, I think it could be challenging to hold that line," Kingston said.

Negotiating changes to the text, or drafting side letters, would be Lighthizer's job.

For now, Neal needs to take the temperature — to find out if Canada's amenable to improvements.

Yussuff said he'd be surprised if Mexico and Canada refused to make changes.

"If they can't get it through Congress, what's the value of that agreement?"

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