By William Mauldin
WASHINGTON -- A Senate committee approved a rewrite of the North American Free Trade Agreement on Tuesday, despite criticism from some lawmakers that it lacks sufficient protections for U.S. companies.
The Senate Finance Committee voted 25 to 3 to back the U.S.-Mexico-Canada Agreement, a pact negotiated with the two neighboring nations by the Trump administration.
The 2018 deal was amended late last year at the insistence of House Democrats, who demanded more enforcement provisions for the pact's new labor rules. The House easily passed legislation to implement the agreement in December.
Yet some U.S. senators -- Democrats and Republicans -- criticized the pact for scaling back provisions favored by American companies and exporters.
Sen. Pat Toomey (R., Pa.) said he opposes the agreement because he believes its stricter rules on auto trade and other safeguards will limit free trade and economic growth compared with Nafta.
For example, a tightening of so-called rules of origin will allow for more tariffs on cars and car parts traded among the three nations if they don't meet thresholds for North American content and relatively high wages.
"We've slapped on all these provisions designed to restrict trade and investment," said Mr. Toomey, who cast one of the three "no" votes on the committee. "It's the first time we're ever going to go backwards on a trade agreement."
Sens. John Cornyn (R., Texas) and Bill Cassidy (R., La.) said Tuesday that they regret the Trump administration's move to scale back a dispute-resolution system that allows companies and investors to challenge and potentially win compensation if they are discriminated against by governments within North America.
Some energy companies would still be protected from unfair treatment in Mexico under so-called investor-state dispute settlement, but lawmakers in Texas and Louisiana worry that this procedure won't protect all businesses. Mr. Cassidy also cast a "no" vote, as did Sen. Sheldon Whitehouse (D., R.I.), who said he wanted stronger environmental protections.
Sen. Bob Menendez (D., N.J.) voted in support, but said USMCA's intellectual-property protections are inadequate. Drugmakers, including those based in New Jersey, had pressed officials to include special market protections for biologic drugs to protect them from generic imitators for 10 years.
Those provisions were stripped out of the version submitted to the House in December, and senators have no opportunity to amend the pact.
Sen. Mark Warner (D., Va.) said he regrets that the agreement doesn't protect companies and U.S. citizens from online content posted by "bad actors." House Speaker Nancy Pelosi had sought to remove liability protections enjoyed by technology businesses that host such content, but wasn't successful.
Despite the criticism, most lawmakers have hailed the pact as a much-needed improvement to the North American trading system, as well as a way to win broad support at a time when politicians in both parties have questioned the benefits of free trade.
"Is it perfect? No, no agreement's perfect," said Sen. Rob Portman (R., Ohio), a former top U.S. trade official. "But this is a big improvement."
Notably, Sens. Sherrod Brown (D., Ohio) and Ron Wyden (D., Ore.) credited changes they developed that will boost the ability to enforce labor rules aimed at Mexico, measures Mr. Brown said will raise Mexican wages and deter further job outsourcing.
USMCA is now headed for a full Senate vote under expedited "fast track" rules and is expected to pass next week, although the timing could be affected by the possible start of a Senate impeachment trial of Mr. Trump.
If Mrs. Pelosi forwards the articles of impeachment to the Senate then a vote would occur later this winter, according to Finance Committee Chairman Chuck Grassley (R., Iowa).
The strong political support for the new version of Nafta removes a large measure of economic uncertainty introduced by Mr. Trump, who threatened to pull the U.S. out of the 1994 North American pact if Congress or trading partners declined to endorse an update on his terms.
Still, some Democrats worry that USMCA won't bring back American jobs lost under Nafta. Sen. Bernie Sanders (I., Vt.) is the only Democratic presidential candidate who has said he would oppose USMCA.
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