WASHINGTON — Louisiana's critical agriculture, energy and petrochemicals industries would likely get a big boost if Congress finalizes a new U.S.-Mexico-Canada trade deal by the end of the year as some Republicans are hoping, but so far, a deal is far from done.
The Trump administration is expected to push the United States-Mexico-Canada Agreement, sometimes dubbed NAFTA 2.0, as a top priority when Congress returns from its August recess.
The trade pact is awaiting passage in the U.S. House, where Democratic leaders have voiced concerns largely over labor and environmental issues and a potential impact on pharmaceutical prices.
"I think it would be really good for our economy to pass USMCA," U.S. House Minority Whip Steve Scalise, R-Jefferson, said in a recent interview. "If we were in the majority we would have already passed it."
Scalise said he's hopeful that Democrats will rally around the proposal when they return next month and House Speaker Nancy Pelosi, D-California, will bring it to the floor for consideration.
"There are a lot of Democratic districts that would benefit tremendously," he said.
Mexico is the top country to receive goods exported from Louisiana each year. The state exported $9.22 billion in goods there last year and $3.57 billion to Canada.
"For Louisiana, the stakes could not be higher," Agriculture Commissioner Mike Strain said in a recent column urging Congress to pass the USMCA.
U.S. Sen. Bill Cassidy, a Baton Rouge Republican on the Finance Committee, has been an outspoken supporter of the proposal during committee hearings on it and the GOP-controlled Senate leadership is backing it as well.
But the proposal reached after months of negotiations among the three countries has languished, as Democrats call for protections for American workers, changes to how prescription drugs are handled that they say would prevent price increases, and penalties to be linked to environmental protections.
“We have been on a path to yes, but it must be a path that leads to an agreement that delivers positive results for American workers and farmers," Pelosi said of the delay, which has frustrated the White House and its Republican allies in Congress.
Pelosi and her allies have argued that, while it provides key environmental and labor standards, USMCA doesn't include an enforcement mechanism to punish offenders of them.
Several representatives from labor groups voiced concerns during a recent House Ways and Means subcommittee hearing on USMCA.
The update to the 25-year-old North American Free Trade Agreement has been pitched as a way to strengthen the countries' global competitiveness, amid an ongoing U.S.-China trade war.
Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto signed the agreement in November, but each country also must approve it through the legislative process.
Trudeau released a statement saying he and Trump spoke by phone Friday about the status of USMCA.
"The prime minister and the president reaffirmed their support for the new North American Free Trade Agreement and welcomed ongoing work towards its ratification," it read.
Vice President Mike Pence has been on a blitz in recent weeks, touting the USMCA proposal at gatherings including those of mostly workers in Pennsylvania and Iowa.
USMCA would continue tariff-free status for American farmers to Mexico and Canada that they have under NAFTA and is expected to increase opportunities through changes to poultry and milk tariffs.
Trump has previously threatened to cancel NAFTA if Congress doesn’t pass his newly-negotiated pact, so protecting the agriculture component has been a key point in the negotiations.
It also would protect the petrochemical industry from new tariffs that could hurt demand for chemicals from the United States and threaten investments — a move that advocates say would protect jobs — and streamline the framework for energy trade across North America.
Among other provisions in the NAFTA update, USMCA would increase requirements for automobiles to qualify for zero tariffs from 62.5 percent of components manufactured in one of the three North America countries to 75 percent. It also would require in three years that at least 40 percent of automobile parts to be made by workers who make at least $16 an hour. Both are seen as wins for the auto industry and auto workers.