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Revamped USMCA passes House in 'major milestone' for North American trade

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Revamped USMCA passes House in 'major milestone' for North American trade

The United States-Mexico-Canada Agreement passed the U.S. House of Representatives by a 385-41 margin Dec. 19 after years of negotiation, impasses and renegotiation, bringing a new era for trade in North America to the verge of enactment.

The bill now moves to the Senate, where it is likely to be considered after the impeachment trial of President Donald Trump, according to Senate Majority Leader Mitch McConnell, R-Ky. McConnell and other Republican senators have expressed disappointment with the revised deal, saying the negotiation process and concessions in the area of pharmaceuticals left it leaning more in favor of Democrats.

In a statement, U.S. Trade Representative Robert Lighthizer, who led talks with Mexico and Canada starting in 2017, called the passage with wide bipartisan support a "major milestone" and added that the replacement to the North American Free Trade Agreement is expected to create between 176,000 and 589,000 U.S. jobs.

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The House passage came after months of contentious closed-door meetings to address Democratic concerns after the deal was first signed by the three countries in November 2018.

A resolution was announced Dec. 10 as Democrats said they had finally reached a deal with the Trump administration to advance a revised version of the USMCA that included new provisions on labor and enforcement, as well as protection to keep down the impact on pharmaceutical prices.

The Mexican Senate has already ratified the revised USMCA, which is subject to approval from all three countries. The deal is still being considered by Canadian lawmakers, who have been waiting for the U.S. to act.

Despite widespread business support for the new agreement, not all would benefit. Automakers are projected to pay nearly $3 billion in tariffs over the next decade under the USMCA, according to an estimate from the Congressional Budget Office. This is due mainly to higher tariffs on vehicles and auto parts because of stricter rules in the new deal, the federal agency said.

"I genuinely hope I am wrong about this, but I fear we can expect that the USMCA will perpetuate the harms of NAFTA for American workers," Rep. Andy Levin, D-Mich., tweeted Dec. 19. "Therefore, I will vote against the USMCA."

The USMCA would replace NAFTA, which went into effect in 1994.