Trade deal could be derailed

Impeachment set to dominate Congress

• President Donald Trump’s top agenda item, a rewrite of the 1994 trade deal between Canada, Mexico and the U. S., could be the first victim of an impeachment inquiry.

The inquiry, announced Tuesday, will test whether congressional Democrats and the White House can attempt to continue governing on other matters. Numerous Republicans have said the impeachment inquiry changes everything.

“I don’t know that they’re ever going to get a vote because they are all fighting,” Trump said Wednesday of House Democrats, accusing them of creating a “manufactured crisis.”

The president and his chief trade negotiator also differed publicly over prospects for congressional action. Speaking at the signing ceremony for a new U.s.-japan tariff-cutting deal, Trump interrupted U.S. Trade Representative Robert Lighthizer as he was predicting an eventual House vote.

“And it’s possible they won’t vote,” Trump said. “I mean, I know these people much better than you do.”

The White House wanted Congress to pass a new trade deal with Mexico and Canada by winter, a timeline that could now be impossible to meet.

Democrats are trying to forge ahead, multi- tasking on trade and budget talks while also preparing for impeachment.

The awkward balance was on display Wednesday, when House Democrats met to discuss their concerns over the revised North American Free Trade Agreement. They are trying to negotiate changes with the White House, but the meeting came less than 24 hours after House Speaker, Democrat Nancy Pelosi, said an impeachment inquiry would proceed.

White House officials have spent months trying to assuage the concerns of House Democrats and labour unions in order to ratify the new trade deal, but a number of key elements remain unresolved. Democrats remain unconvinced new labour rules will be adequately enforced, for example, and they have sought assurances from Trump.

The chair of the Senate Finance Committee, Republican Chuck Grassley, issued a warning that the new trade deal, the United States-mexico- Canada Agreement ( USMCA), was now at risk because of impeachment politics.

“If Democrats use impeachment proceedings as a basis to not act on policy that will directly benefit Americans like the USMCA or lowering prescription drug prices, that would prove they’re more interested in politics and opposing the president at all costs than serving the American people,” Grassley said.

The White House also issued a dire admonition following Pelosi’s announcement, flatly stating that all chances for legislative wins were off the table.

“House Democrats have destroyed any chances of legislative progress for the people of this country by continuing to focus all their energy on partisan political attacks,” White House press secretary Stephanie Grisham said. “Their attacks on the president and his agenda are not only partisan and pathetic, they are in dereliction of their Constitutional duty.”

In a research note, financial firm Raymond James offered a similarly stark assessment. “Legislating is dead. The idea of bipartisan action on drug pricing, infrastructure, and potentially the passage of the USMCA ( the new NAFTA) are dead until after the 2020 election,” the firm wrote.

But that view isn’t unanimous. “There could be a lane for USMCA approval to show that Congress can get things done while the investigations continue,” said Dan Ujczo, a trade attorney with Dickinson Wright.

Congress has juggled trade and impeachment in the past. In 1973, House lawmakers passed what became the Trade Act of 1974 even as their impeachment inquiry of president Richard Nixon was getting underway, said Rufus Yerxa, president of the National Foreign Trade Council.

The White House on Wednesday tried to send signals that Trump would be able to proceed on parts of his agenda without Congress. Trump said, without offering any evidence, that a trade deal with China could happen much sooner than he had let on just last week.

“They want to make a deal very badly,” Trump told reporters. “It could happen. It could happen sooner than you think.”