U.S. Sen. Pat Toomey is among a small chorus of critics of a new North American trade agreement that has drawn bipartisan support in Congress and White House approval. And the Pennsylvania senator raised his voice in opposition to the U.S.-Mexico-Canada Agreement (USMCA) on the Senate floor Wednesday.
“We are going to consider a trade agreement that is designed to diminish trade,” Toomey said. “Which should be very disturbing for those of us who understand how much economic growth comes from trade.”
Toomey has long been a supporter of free trade, and is an outspoken critic of USMCA and other economic policies imposed by the Trump administration. But Toomey said the deal will create little economic growth, and outlined specific provisions he believes hurt the auto industry and pharmaceuticals.
Both House Democrats and the White House are touting the deal, which will supplant the North American Free Trade Agreement (NAFA), as a win. It creates more labor protections for auto workers in Mexico, including increased wages (a minimum of $16 an hour), and require a percentage of Mexican-made parts to be sourced from factories with those protections. Economists say those changes could lead to an increase in how much Americans pay for cars.
“It’s really the end of free trade in automobiles and auto parts with respect to Mexico,” he said. “The agreement imposes minimum-wage requirements that are designed to be impossible for Mexican factories to meet -- and when they don’t meet them, Mexican autos and auto parts will be subject to a tax. So Americans who buy these cars will have to pay a tax on them.”
Still, American unions -- and many Democrats -- hailed such provisions because they could discourage U.S. companies from outsourcing jobs to Mexico.
“Now we have a deal that working people can proudly support,” said AFL-CIO President Richard Trumka after the U.S. House passed the deal in December. Trumka represents the largest federation of labor unions in the U.S. -- an important Democratic voting bloc, and one which the Trump administration worked to appease in the negotiation process.
Toomey does support one part of the deal, which codifies provisions for a digital economy that didn’t exist when the old NAFTA pact was ratified in the 1990s. But he's critical of a provision which assigns an expiration date to the new deal, a detail he worries will create economic uncertainty as the deadline approaches.
“We have never put a termination date on a trade agreement,” Toomey said. “A free and fair and reciprocal trade agreement that has no barriers to trade doesn’t necessarily need to be renegotiated with any specific frequency.”
For his part, Toomey's Democratic counterpart U.S. Sen. Bob Casey plans to support the agreement, though he was somewhat measured in his praise and gave little credit to Trump.
"The new NAFTA represents progress from the status quo," he said in a statement. "The initial version negotiated by the Trump adminsitration was a corporate trade deal and completely unacceptable." Casey said the version negotiated and passed by House Democrats has "substantial improvements" and that "it is only because of the Democratic improvements that I am able to support this agreement."
Toomey’s criticism also goes against many House Republicans who voted in favor of the bill, including Western Pennsylvania's U.S. Rep. Guy Reschenthaler (R-14) and U.S. Rep. Mike Kelly (R-16).
The Senate is expected to pass the agreement this week.