During Donald Trump’s first administration, he replaced the North American Free Trade Agreement (NAFTA).
Trump put the United States-Mexico-Canada Agreement (USMCA) in place, but it was not a perfect deal.
It turns out that then-Speaker Nancy Pelosi (D-CA) had removed some provisions that would have enabled Trump to lower certain medical costs, but now he can fix what she broke.
Trump has been a vocal opponent of NAFTA for some time, so it was not a surprise that he wants to replace it with a deal of his own.
Speaking about the NAFTA agreement, Trump had called it “one of the worst trade deals ever.”
This was also a hot topic during a 2016 presidential debate, with Hillary Clinton touting the deal and stating, “I think my husband did a pretty good job [on trade deals] in the 1990s. I think a lot about what worked and how we can make it work again.”
Trump returned fire, stating, “He approved NAFTA, which is the single worst trade deal ever approved in this country.”
Trump replaced NAFTA late in his first term, touting the USMCA as the deal that would fix everything broken by the previous trade agreement.
The White House press release claimed, “While NAFTA was a disaster for American workers, USMCA will deliver new jobs and better protections for hardworking Americans across the country.”
The statement further declared, “USMCA is a monumental win for American farmers and ranchers, improving access to Canadian and Mexican markets to export their goods.”
The deal did have to be approved by Congress, as do all major trade agreements. And it turns out that then-Speaker Nancy Pelosi made some last-second changes that weakened the deal, likely to help a Democrat president on what is a key issue in every election… the cost of medicine.
One of the original provisions of the USMCA was a measure to block foreign entities from being able to create knockoff products, which would have enabled the United States to lower the costs of drug prices domestically.
Andrei Iancu, who helped negotiate the USMCA deal during Trump’s first administration, stated, “But ultimately, that provision designed to reduce foreign freeloading was stripped from the agreement at the insistence of then-House Speaker Nancy Pelosi, whose support was necessary to pass the USMCA's implementing legislation through Congress.”
With the GOP now in charge of both chambers of Congress, Trump has the opportunity to fix the provision, but he will need the cooperation of Democrats in order to make it happen.
This sounds like the perfect bargaining chip to use with Democrats in their effort to have Obamacare subsidies extended. If the GOP is unable to come up with a workable fix to Obamacare, they could trade this provision for a one- or two-year extension of the subsidies. If we give them their extensions, we have to get something out of it, and this is trading a permanent cost-reduction measure for a temporary subsidy. It’s a win for both sides.
