What does a Democratic House mean for NAFTA 2.0?

Nov 12, 2018

On both the U.S. and Canadian sides of the border, the new trade treaty between the two countries is considered to face long delays before a congressional vote.

The reversion to Democratic control of the House means different people will be dealing with the U.S.-Mexico-Canada deal

"Particularly the Ways and Means Committee, of which I am a member and will be a majority member," said Rep. Brian Higgins (D-Buffalo). "My seniority will go up and I am a member of the Trade Subcommittee. So we will have direct engagement with Ambassador Lightizer, who's the U.S. trade representative and also the president and the vice president and the U.S. treasury secretary, Steve Mnuchin."

Higgins said House Democrats might want an infrastructure bill that would create demand for American-made steel and concrete in exchange for getting rid of the presidentially-imposed tariffs, which he reminds people are a tax.

Canadian Center for Policy Alternatives Trade Policy Researcher Scott Sinclair said current tariffs and higher tariffs might hurt more.

"The threat of additional tariffs on autos and auto parts has not disappeared," Sinclair said. "There's still an investigation going, so-called, Section 232, and that could lead to quite a significant negative impact on integrated supply chains, in the Great Lakes region in particular."

Some Canadian experts say there might not be a vote on the treaty until 2020, continuing the uncertainty for another year.

Sinclair said there are significant issues like the treaty keeping up Canadian prescription drug prices by delaying generic drugs with their lower prices.