WASHINGTON — A new North American trade deal is nearing the finish line after its approval Tuesday by the Senate Finance Committee.
Farmers and ranchers have been waiting impatiently for more than a year to see Congress finalize the U.S.-Mexico-Canada Agreement, which represents one potential bright spot amid ongoing tariff battles that have depressed commodity prices and hammered their bottom lines.
“It’s going to be a big boost to the economy,” Sen. Chuck Grassley, R-Iowa, told reporters Tuesday after the panel voted 25-3 in favor of the deal.
Grassley, who is chairman of the committee, cited International Trade Commission estimates that it could result in growth that would produce 176,000 new jobs.
The deal is expected to easily clear the full Senate, but the timing remains unclear. Grassley suggested that it could be wrapped up as soon as next week but added that it also could be delayed by an impeachment trial.
House Speaker Nancy Pelosi has thus far been holding the articles of impeachment approved by the House. As soon as she sends them, the resulting trial will take priority over all other matters.
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Tuesday’s vote came despite a few bipartisan objections. One Democrat voted against the deal, saying it doesn’t do enough to tackle climate change.
Sen. Pat Toomey, R-Pa., also opposed it. He said sticking with the existing North American Free Trade Agreement would be better.
Toomey conceded the need to update an agreement written last century, one that devotes an entire section to the handling of cassette players in automobiles.
But aside from the modernizing, he said, many of the other changes are aimed at reducing the United States’ trade deficit with Mexico in ways that would raise prices for American consumers buying cars made in Mexico.
“It’s the first time we’re ever going to go backwards on a trade agreement,” Toomey said.
He also objected to the process that produced the deal, saying the Finance Committee had no opportunity to effect actual changes.
Take predictions of impending economic booms with a major grain of salt, he added, because the vast majority of the agreement is identical to NAFTA and introduces a sunset provision that will chill future investment.
“We’ve taken a free trade agreement that needed modernization — and there is modernization — but then we’ve slapped on all of these provisions designed to restrict trade and investment,” Toomey said. “We’ll get no economic growth out of this and we, the Senate and the Senate Finance Committee, are allowing ourselves to be marginalized.”
Tuesday’s session represented the Finance Committee debut of Sen. Ben Sasse, R-Neb., who recently joined the panel.
Sasse welcomed the opportunity to cast his first vote on the committee in favor of USMCA and talked up the importance to Nebraska agriculture.
He cited the state’s $7 billion in 2018 agricultural exports, a figure that put it behind just five other states that all have larger populations.
“Nebraska is ready to keep feeding the world, and we need open trade markets to do so,” Sasse said.
But he also agreed with Toomey’s criticisms.
Sasse told The World-Herald after the hearing that Toomey is correct in saying the bulk of the deal is identical to NAFTA and that not all the changes are positive.
But he said agricultural markets have internalized the potential risk of NAFTA going away altogether and it’s crucial for that sector to have the stability that will come from finalizing the deal.
“There’s so many problems in the ag economy right now, and a lot of them are driven by the instability of lack of certainty and permanence in future trade relationships,” Sasse said.
He suggested that agriculture is more of a clear winner from the deal than some other sectors of the economy.
“If you look at it from a Great Lakes, industrial, auto-producing state’s perspective, it’s much less on-net beneficial for those of us who are free traders, but for ag the benefit continues to redound to people who produce more than we can consume,” Sasse said.