Monthly Archives: June 2019

‘Big Pharma’ is the big winner of the USMCA

The longstanding debate in the United States on its sky-high prescription drug prices and access to health care is raging where you might least expect it — within the pages of President Trump’s new trade deal: the U.S.-Mexico-Canada Agreement (USMCA).

bunch of white oval medication tablets and white medication capsules

Photo by Pixabay on

Critics of the USMCA are very concerned that it would increase medicine prices in North America and strengthen the hand of one of the world’s most powerful industries.

At Boston University’s Global Development Policy Center and School of Public Health, we have been studying the impact of trade treaties on access to medicines and can confirm that there is real truth to these concerns. They require policy action.

At issue is is a section of the USMCA that would protect pharmaceutical companies with new biologics from generic competition, so-called “biosimilars.”

Biologic medicines come from living cells that contain proteins and other materials that can treat diseases and conditions like cancer, rheumatoid arthritis and multiple sclerosis.

“Biosimilar” medicines are similarly composed drugs that are approved for marketing when presenting data demonstrating that there is no clinically meaningful difference in their safety, quality and efficacy from the original biologic.

Biologics have been found to be the most significant driver of prescription medicine prices. Citing a report by IQVIA Institute, Forbes magazine reported that “biologic drugs represented 2 percent of all U.S. prescriptions, but 37 percent of net drug spending. Since 2014, biologic drugs account for nearly all of the growth in net drug spending: 93 percent of it, in fact.”

For this reason, many have argued to lower the number of years for biologic exclusivity, not increase them.

Even though only 2 percent of patients in the U.S. use biologic medicines, they represent 40 percent of total prescribing drug expenditure. It has been estimated that biosimilar medicine costs on average 30-percent lessthan the originator biologic medicine.

Promotion of biosimilar medicines in the U.S. could save consumers billions of dollars. According to Federal Drug Administration Commissioner Scott Gottlieb, the anticompetitive tactics used by manufacturers of biologic medicines are one reason market entry of biosimilar medicines is so slow.

A new tactic is the USMCA, which under Article 20 F. 14 would grant at least a 10-year “test data” exclusivity period for new biologics. Currently, Canada has an eight-year test data exclusivity period and Mexico has a five-year limit, so the USMCA would force both countries to increase this period.

Granting exclusivity essentially gives a pharmaceutical company monopoly rights that free the firm from competition and allows it to charge higher prices than it would under competitive conditions.

In a comprehensive review of the literature, we find that, generally, exclusivity rules like these in past trade agreements have tended to raise the prices of medicines.

In fact, in a study we did specific to biologics, we found that provisions that protect biologics in the U.S.-Chile Free Trade Agreement increased the unit price of biologics in Chile.

In many ways, these measures are a form of mercantilism for the interests of firms in leading economic sectors, rather than “free trade” that would create more competition and lower prices.

Indeed, the pharmaceutical industry is the most active lobby group when it comes to trade agreements. One analysis of the Trans-Pacific Partnership (TPP) — a deal that was scrapped — stated that it ended up having many of the same provisions for pharmaceuticals and biologics that the USMCA has.

That analysis by Sunlight Foundation found that pharmaceutical companies and their associations mentioned the TPP in 251 separate lobbying reports — two-and-a-half times more than the next-most active industry, the auto sector.

Pharmaceutical companies argue that since test data is so expensive to produce, it is an unfair advantage to let other companies rely on that data without cost. Biologics research and development is supposedly a higher-risk endeavor, with:

  • higher capital costs,
  • higher material costs,
  • greater manufacturing costs and uncertainties,
  • longer development times, and
  • lower late-stage success rates compared to biosimilar drugs.

According to pharma, a failure to include substantial data exclusivity as part of a statutory framework for “biosimilars” would undermine incentives to invest in biomedical innovation and thus would slow progress in the development of breakthrough therapies for patients suffering from currently untreatable conditions.

Recent research published in Nature Biotechnology calls this rationale into question. The authors found no evidence that developing biologic drugs was more time-intensive than traditional small-molecule (biosimilar) medicines.

The study’s lead author wrote: “Our study shows that biologic and small molecule drugs take a similar amount of time to develop through clinical trials. Policies intended to extend exclusivity periods for biologics, as Canada is now doing due to the USMCA trade deal, should not be justified by pointing to longer pre-market development times for biologic drugs.”

Given the new evidence that developing biologic drugs is not more time-intensive, it is necessary to reconsider the period of market exclusivity for such innovation that would not unduly favor one type over others.

Whatever reward for innovation the policymakers choose, it should not impede access to such innovation for those who most need it.

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The 2020 Democrats just made a move on a big Trump weakness

Whether President Trump knows this, he’s quite vulnerable to Democratic attacks in his signature area — trade — which is why he badly needs a big victory on the issue. Such a victory might include reaching a good deal with China, or getting Congress to pass his revamp of the North American Free Trade Agreement.



But the top-tier 2020 Democratic presidential candidates have just made a move in unison that could make that latter possibility less likely.

I have learned that all of the leading Democratic contenders have signed a statement opposing congressional passage of Trump’s renegotiated NAFTA unless major changes are made. This could make it more difficult for Democrats — many of whom have already criticized the deal — to pass it, which could, in turn, end up denying Trump a serious political victory going into the 2020 election.

The top-tier Democratic candidates — Joe Biden, Elizabeth Warren, Bernie Sanders, Pete Buttigieg, Kamala D. Harris, and Beto O’Rourke — have all joined a statement that was written by the Citizens Trade Campaign, a coalition of groups pushing changes to the deal, which is known as the United States-Mexico-Canada Agreement, or USMCA.

That statement, which was sent my way, says Congress should not enact the deal “unless and until stronger labor and environmental terms with swift and certain enforcement are added and language on pharmaceutical monopolies that locks in high medicine prices is removed.”

All six of those campaigns confirmed to me that they had signed on.

The USMCA alters the old NAFTA in numerous ways. It requires a higher percentage of automobiles to be manufactured in the three countries to qualify for no tariffs, and it also requires 40 percent to 45 percent of auto parts on such cars to be manufactured by workers making at least $16 per hour by 2023. It also expands patent protections for drugs against generic competition.

As it is, many House Democrats want improvements to this deal, in the form of better labor and wage standards, as well as tougher mechanisms to enforce those standards, and they view the copyright expansion as a giveaway to Big Pharma. House Speaker Nancy Pelosi (D-Calif.), under pressure from labor, recently saidthe deal won’t get a House vote without changes.

Trump is desperate to get this deal through Congress, and Vice President Pence has reportedly been trying to generate support for it in battleground House districts in the industrial Midwest, in hopes of pressuring House Democrats to support it.

But now that the top-tier Democratic candidates have signed on to a statement opposing congressional approval without substantial changes, it could become more difficult to get it approved. If it doesn’t, Trump might have to revisit the deal with Canada and Mexico, which he surely does not want to do. The changes the Democratic candidates want are broadly in keeping with what labor and many House Democrats want.

This is of particular interest when it comes to Biden and O’Rourke. Warren and Sanders have long opposed NAFTA. But Biden and O’Rourke have supported NAFTA in the past, and progressives have trained particular fire on the former vice president over trade, seeing him as representative of the pro-free-trade, corporate wing of the Democratic Party.

But Biden’s call for changes to the current NAFTA rewrite suggests he’s trying to shore up his left flank against such attacks.

“Joe Biden believes that the agreement the Trump Administration has negotiated is a gift to big pharmaceutical companies,” Biden spokesman Andrew Bates tells me, adding that “its labor and environmental provisions must be strengthened, in a fully-enforceable fashion.” Many of the other presidential candidates provided the Citizens Trade Campaign with statements echoing these concerns.

All this also reflects movement in the Democratic Party toward a more progressive overall position on trade, and these criticisms of NAFTA provide a kind of template around which a party-wide consensus might start to form in opposition to Trump on this issue.

As economist Jared Bernstein explains, Trump is vulnerable on trade even though he successfully exploited general dissatisfaction over the issue in 2016, because his actual agenda hasn’t sufficiently focused on workers (copyright protections don’t necessarily mean more manufacturing jobs). What’s more, his trade wars have been motivated by a reflexive anti-globalization posture, and are causing disruptions that are harming his key constituencies.

That’s why polling shows that Trump’s policies on trade and China are under water, even in the industrial Midwest.

By contrast, Democrats can stand for restoring sensible, reality-based international cooperation and deal-making to the heart of our trade agenda. As Bernstein points out, this can also include industrial policy — along the lines of what Warren has proposed — that involves government efforts to help industries such as green technology compete globally and to assist smaller companies in assisting in global supply chains.

Part of such an agenda could include a better renegotiated NAFTA — that is, a more pro-worker, pro-environment international agreement. Though there will be extensive battling in the primaries over this issues, the Democratic candidates appear to have edged in the direction of such a consensus.

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Mexico first to ratify USMCA trade deal, Trump presses U.S. Congress to do same

MEXICO CITY (Reuters) – Mexico on Wednesday became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) agreed late last year to replace the North American Free Trade Agreement (NAFTA) at the behest of U.S. President Donald Trump.

Presidential candidate Andres Manuel Lopez Obrador waves as he addresses supporters after polls closed in the presidential election, in Mexico City

By a vote of 114 in favor to 4 against, Mexico’s Senate backed the deal tortuously negotiated between 2017 and 2018 after Trump repeatedly threatened to withdraw from NAFTA if he could not get a better trade agreement for the United States.

Mexican President Andres Manuel Lopez Obrador had already anticipated ratification this week in the Senate, where his leftist National Regeneration Movement (MORENA) and its allies have a comfortable majority in the 128-member chamber.

There has been little parliamentary opposition in Mexico to trying to safeguard market access to United States, by far Mexico’s top export destination, and the trade deal was approved with overwhelming cross-party support in the Senate.

Mexico sends around 80% of its exports to the United States, and Trump last month vowed to impose tariffs on all Mexican goods if Lopez Obrador does not reduce the flow of U.S.-bound illegal immigration from Central America.

Lopez Obrador says he wants to avoid conflict with Trump, but noted at the weekend that the tariff dispute showed Mexico needed to become more economically self-sufficient.

Trump congratulated Lopez Obrador on Twitter for Mexico’s approval. “Time for Congress to do the same here!” he wrote.

Lopez Obrador, meanwhile, posted a video on Twitter in which he called the Senate’s approval “very good news” and said it augured well for Mexico’s relations with the United States.

Canada, which has also fought with Trump over trade, is pressing ahead to ratify the deal. The main question mark hanging over its ratification is in the United States, where Democratic lawmakers have threatened to block the process.

Earlier on Wednesday, U.S. Trade Representative Robert Lighthizer said he believed Democrats’ concerns on enforcing labor and environmental provisions in USMCA can be sorted out quickly. He spoke just hours after Democratic leader Nancy Pelosi said she still has many concerns over USMCA.

Trump, who had excoriated the 25-year-old NAFTA as a “disaster” for U.S. workers, wants to claim a first major trade deal victory as the campaign for the 2020 presidential election begins. The Republican formally here opened his re-election campaign in Florida on Tuesday and two dozen Democrats are competing for the party’s nomination to run against Trump.

Trump, Canadian Prime Minister Justin Trudeau and Mexico’s previous president Enrique Pena Nieto signed USMCA on Nov. 30, 2018 after months of often acrimonious talks stretching back to the American president’s first few days in office.

Lopez Obrador took office on Dec. 1, 2018.

Three of the four Mexican votes against the deal came from MORENA senators, as did one abstention. The other vote against the deal was from an independent senator, while two members of the center-right National Action Party (PAN) also abstained.

Seven senators were not present for the vote.

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Salmon Rebellion

First Nations have a plan to get salmon farms out of their waters


Last year on August 24, Ernest Alfred, an elementary-school teacher and hereditary chief from the ‘Namgis, Lawit’sis, and Mamalilikala First Nations, boated out to Swanson Island, British Columbia, and began to set up tents with a small group of other First Nations activists.

A few days earlier, Alfred had been sitting in an emergency community meeting about the problem of the fish farms of the Broughton Archipelago. Many people, including Alfred, were certain the pens were the reason behind the long decline of wild salmon in their homeland. Decades of grassroots organizing and lawsuits had shifted the balance of power between BC’s First Nations and the Canadian agencies that had leased the areas to the fish farms in the first place. In June 2018, several leases in the waters of the Musgmagw Dzawada’enuwx First Nation would expire, and hopes were high that the leases would not be renewed.

But Marine Harvest, the Norwegian company that held those leases, wasn’t acting like they were expiring. Instead, it was making plans to restock the farms with smolts—young Atlantic salmon that wouldn’t be ready to harvest when the leases ended. Alfred didn’t think that the community could risk any more delays. Last fall, the wild salmon run in the archipelago had been frighteningly low.

“We probably have two years,” Alfred said. “We are not just talking about food security and what we eat. My brother is a guide. He takes tourists who come from all over the world, and he takes them to watch the grizzly bears. And the bears couldn’t catch any fish. There are probably cubs that went to sleep for the winter that didn’t get fat enough and won’t wake up next spring.”

Alfred and his niece, Molina Dawson, stood up at the meeting. “I’m not interested in this process anymore,” Alfred said. “I don’t want to write letters. I’m going to pack my bags and take my tent and go out to this farm, and I’m not going to move until something happens.”

When the group reached Swanson, they informed the Marine Harvest employees on-site that they were being occupied, then asked where to set up tents. “They thought it was pretty cute,” said Alfred. “They didn’t take us too seriously at the beginning.” (Marine Harvest did not respond to an offer to share its version of events.) The occupiers set up camp on a floating walkway above the salmon pens.

The next day, a site manager for Marine Harvest seemed annoyed that they were still there. He came up to Alfred and told him he was trespassing. “No, you are,” Alfred said.

The waters of the Broughton Archipelago are home to at least two dozen salmon farms, according to a 2013 survey, but Alfred had chosen Swanson Island for one very specific reason: The island itself is the traditional territory of his mother’s ancestors. As long as Alfred stayed on the island, he was virtually untouchable. “It wouldn’t be right for me to go to someone else’s territory and say “get out,” Alfred said. “But I also chose it because it had not-too-bad cell coverage. Internet was very important.”

Internet was very important because Alfred did not intend to leave Swanson Island until he knew for certain that John Horgan, the premier of British Columbia, was not going to renew the leases in June. Still, even as Alfred stayed connected through the rest of the world via telecommunications, living on the island was an adjustment. “At this hour, baby seals on the island next to us sound like zombies out to get me,” Alfred wrote on his Facebook page one evening in September. “I’m going to bed!”

When the fish farms arrived in the 1980s, residents of the archipelago did not welcome them with open arms, despite promises of jobs and money. “Our people from the very beginning were very skeptical,” Alfred said. “Right off the bat, the old people—a lot of people call them ‘elders,’ but in my tradition the word that we use literally means ‘old people’—said, ‘Why would we do this when Mother Nature grows salmon for free? We would be acting as gods.’”

But it wasn’t up to the First Nations. The farm leases had been negotiated with the Canadian federal government. Over the next few decades, a series of court rulings gave legal backing to something that had always been historically true: Many of Canada’s indigenous tribes, particularly those in the western provinces, had never signed treaties giving up control over their territory.

In 1989, Carrier Lumber submitted a proposal to the BC government to log forest on Xeni Gwet’in land. In response, the Xeni Gwet’in declared the forest off limits for all logging, mining, and road building but said that non-natives were welcome to ask permission to “come and view and photograph our beautiful land.” It took the case decades to reach its conclusion, and when it did in 2014, a new legal precedent was set: Any First Nations land that was never formally ceded to the Canadian government could not be developed without the consent of those First Nations that have a claim to it. That included land that had been used for hunting or foraging, not just land that had been continuously occupied.

By then, BC’s native salmon population was in steep decline. “In the mid ’90s—that’s when my dad sold his fishing boat,” Alfred said. “The farms went in in 1989. We started to see effects almost right away.” Commercial fishery catches between 1995 and 2005 were the lowest in recorded history, and then the catch halved again between 2006 and 2014.

There were several theories as to why the salmon runs were diminishing. Salmon farms around the world were struggling with an epidemic of sea lice: tiny crustaceans that latch onto salmon in ocean waters and feed off their blood and tissue. Were fish farms providing year-round habitat to a parasite that normally would have limited opportunities to latch onto juvenile wild salmon as they emerged from streams and headed out to the open ocean? Scientific research showed that sea lice from fish farms could infect nearby wild salmon. Was that one reason why so few fish were coming back from the ocean each year?

Salmon farms were also facing periodic epidemics of piscine reovirus. A study by Alexandra Morton, a whale researcher who began studying fish farms after the area’s orca population declined, found that 95 percent of farmed Atlantic salmon had the virus, and that about 40 percent of wild Pacific salmon that spawned near the salmon farms, like those in the Broughton Archipelago, also had the virus. In areas of BC that were farthest away from salmon farms, the incidence of the virus was only 5 percent. Piscine reovirus causes heart damage, and some biologists surmised that it could be preventing wild salmon from making it to the ocean, or from surviving the long journey upstream to spawn.

But none of this changed the fact that, in the more than 20 years since salmon farming began, farmed salmon had become a $1.2 billion industry and BC’s largest agricultural export. A third of those salmon were coming from the Broughton Archipelago. Alaska had managed to ban farmed salmon, but it did so in the 1990s, before the industry got too powerful to overcome resistance. Meanwhile, companies like Marine Harvest had begun to hammer out agreements with some local tribes, which made agitating to remove the fish farms more politically complicated.

To Alfred, there’s no amount of compromise that would be worth hammering out. “It is a lot of money to these impoverished communities, but it’s a drop in the bucket to these companies,” he said. “The people who have signed those agreements are not proud of them.” According to Alfred, some tribal members believed that just getting the farms to operate differently might work: for example, moving pens farther away from traditional salmon migration routes, or closing down the farms periodically to break the lifecycle of any parasites or viruses.

But those changes were hard to monitor, hard to enforce. Alternative solutions to closing down the farms, like moving them far away from wild salmon and into facilities on land, weren’t happening fast enough. BC’s First Nations had started their own above-ground fish farm, Kuterra, which began farming in 2013, but no similar operations had followed. “The most important thing to remember is that it’s been done and we’ve proved our point,” Alfred said. “Its only downfall is that it doesn’t actually make money.” (Kuterra recently began to turn a profit but is unlikely to recoup its start-up costs.)

A few weeks into the occupation, Alfred and the other occupiers (there have been anywhere from two to 18 people living on the island at any given moment) moved into an enclave of deserted cabins on the island, which had a good view of the Marine Harvest operation. Swanson Island is not the only occupation. Another Marine Harvest location, Midsummer Island, was occupied in September by a group of Musgamagw Dzawada’enuxw and Namgis, including Alfred’s niece. They agreed to leave in November after Marine Harvest filed an injunction against them in court. In October, the Matriarch’s Camp, led by Tsastilqualus Umbras, a Ma’amtagila grandmother, set up outside the offices of BC premier John Horgan in Langford, relocating at one point to the Department of Fish and Wildlife.

Gradually, it began to look like the occupations were having some effect. In October, Lana Popham, the BC minister of agriculture, sent a letter to Marine Harvest, warning it not to stock any more salmon at its farm in Port Elizabeth, whose lease was set to expire in June 2018, because “we are entering into sensitive discussions with some of the First Nations in the Broughton Archipelago who remain opposed to open net pen salmon farming in their territories.”

A few days later, Horgan said at a salmon farm industry meeting that companies needed to remember that their leases were “not in perpetuity.” Marine Harvest objected to this messaging. “If there’s a better way to do business, we’re always interested,” Marine Harvest Canada spokesman Ian Roberts told CBC News, “but today they are very, very good sites for growing fish.”

Then, in November, a state senator in neighboring Washington announced he was planning a bill that would phase out all fish farm leases there. With the state spending hundreds of millions of dollars preserving wild Pacific salmon runs, said Senator Kevin Ranker, “raising invasive Atlantic salmon that we classify by state law as a pollutant makes no sense.”

The bill was almost certainly the direct result of the September escape of over 160,000 Atlantic salmon from a fish farm run by a company named Cooke Aquacultlure. Atlantic salmon have been used for West Coast fish farming because they are believed to not be able to survive in the Pacific Ocean on their own, and because they could live closer together than their Pacific cousins without attacking each other. Months after the escape, however, fishers in Washington are still reeling in Atlantic salmon. In December, Washington’s Department of Natural Resources terminated the lease on the farm where the escape took place.

Alfred spent New Year’s Eve on Swanson Island. “Swanson Occupation Day 131!” he announced cheerfully, camera trained on the orange-yellow Wolf Moon rising over the bay. “Happy New Year from everyone at Swanson Island Occupation!” He, some friends, and their children took all the pots and pans outside and banged them together in celebration. It wasn’t what he had planned a year earlier, but then, a lot of things had happened in 2017 that he hadn’t planned on, beginning with his decision, in August, to take a leave of absence from teaching and to occupy a fish farm instead.

As a hereditary chief, Alfred was raised with a particular responsibility to keep alive culture and tradition, and to carry it forward. “I quit my job so that I could have peace of mind,” Alfred said. “I didn’t want to lie to my students anymore about being stewards of the land when I wasn’t doing it.” A group of his former students, now high schoolers, organized two school walkouts in solidarity and demanded that the local supermarket not stock farmed salmon.

Alfred has heard that Marine Harvest will restock the pens off of Swanson soon. There are rumors afoot that the management of Canada’s fish farms would be taken from the Department of Fisheries, and Alfred remains optimistic. He suspects that early on in the occupation, Marine Harvest had tried to get a permit to evict him but then realized that his ancestral relationship to the land made that impossible. “They know,” Alfred said. “They know they are going to lose.”

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AFL-CIO’s Richard Trumka laughs at Trump’s suggestion unions love new trade deal

President Donald Trump has repeatedly said unions are supportive of the new North American trade pact, as he ramps up his push for Congress to approve the deal this summer.


But the head of America’s largest labor organization thinks Trump’s claim is laughable.

“Maybe he’s talking about the unions in some other country?” AFL-CIO President Richard Trumka told POLITICO, laughing at Trump’s suggestion that unions are “in favor” of the deal his administration negotiated with Mexico and Canada to replace NAFTA.

“I don’t have a clue” where Trump gets that from, Trumka said, “because we’re pretty united.” Unions in the U.S., he warned, will not support the U.S.-Mexico-Canada Agreement in its current form.

The AFL-CIO and other major unions like United Automobile Workers have said the USMCA features some improvements for workers compared with NAFTA, but the Trump administration still has work to do to earn their backing.

And while ratification of the USMCA is Trump’s top legislative priority this year, getting the deal approved in the Democrat-controlled House could hinge on the administration’s ability to address the shared concerns of House Democrats and organized labor, such as securing changes to bolster enforcement of the pact.

Trumka emphasized that labor unions want to support USMCA, but he cautioned the administration to allow time for negotiations with House Democrats to play out.

“We still have a lot of work to do and rushing this thing or trying to push it through to a vote will backfire, because if people were forced to vote on the current text, they would have to vote ‘no,'” Trumka said in an interview Monday, ahead of a three-day NAFTA town hall series the AFL-CIO is hosting in Pennsylvania, Ohio and Michigan.

House Speaker Nancy Pelosi and Democrats have made clear that the administration must make changes to the deal’s provisions on enforcement, labor, the environment and drug pricing before a final vote can be held. Last week, Pelosi appointed nine House Democrats to four committees that will negotiate proposed changes on those topics with U.S. Trade Representative Robert Lighthizer.

Lighthizer has been active in courting congressional support for the deal. He has expressed a desire to get the pact approved with backing from a large number of Democrats and held numerous meetings with Democratic lawmakers in an effort to listen to their concerns.

The U.S. trade chief has repeatedly told Democrats he does not want to send Congress legislation to implement the trade deal until Pelosi gives her blessing.

But in recent weeks, House Democrats and insiders tracking the deal increasingly believe that other administration officials are growing impatient and want to move more quickly by sending the bill to Capitol Hill without Pelosi’s support.

“There are people in the Trump administration that are trying to rush this thing through and I think it’s a terrible, foolish strategy because it will blow up in their face,” Trumka said. “I think the reasonable people in the Trump administration know it’s more important to get this right than to do it tomorrow.”

If the administration decides to make a pressure play, Pelosi could short-circuit consideration of the deal by removing it from the so-called fast-track procedure Congress agreed to under the Trade Promotion Authority legislation. That process allows the deal to be approved in an up-or-down vote by a simple majority in both chambers, in an effort to provide for speedier approval of trade deals.

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India slaps back at U.S. with tariffs, lobbing small but strategic strike ahead of G-20 summit

India lobbed a small but strategic strike in President Trump’s trade war, imposing retaliatory tariffs on 28 products and layering in another economic stressor just days before leaders from both nations meet at the Group of 20 summit.


The penalties run as high as 70 percent, affecting agricultural goods such as apples, almonds and walnuts, as well as chemical and finished metal products. India said the move was “in the public interest” following Trump’s decision to revoke India’s preferential trade privileges.

India had been the biggest beneficiary of the Generalized System of Preferences, a program designed to help developing countries sell to U.S. consumers. But Trump, irritated by the United States’ hefty trade deficit with New Delhi, ended India’s favorable trade status on June 5. Last year, India sold $54.4 billion worth of goods to the United States but imported a little more than $33 billion in U.S. products.

Though India’s action affects an estimated $241 million in imports — a pittance compared with the numbers involved in the White House’s trade battles with China and Mexico — it’s another pressure point in an increasingly tense and uncertain global economic outlook. The tariffs took hold Sunday, just ahead of next week’s G-20 summit in Osaka, Japan, where economists and business leaders expect Trump and Chinese leader Xi Jinping to discuss the trade.

“This is a big deal,” tweeted Michael Kugelman, deputy director of the Asia Program at the Wilson Center, a Washington-based think tank. “Not as much because of the value of the goods soon to be taxed … but more so because until now, Delhi’s reaction to Washington’s moves had been strikingly restrained.”

What began as a tool to cut down on U.S. trade deficits has quickly morphed into a defining feature of trans-Pacific trade. Tariffs have become Trump’s preferred means of exerting political pressure on other nations, even in matters not directly related to trade, such as his threat last month to impose tariffs on Mexico over migration. Although Trump has repeatedly — and inaccurately — said that other countries bear the burden of the tariffs, trade and business experts say the reality is that U.S. businesses pay the levies first and pass those costs on to consumers.

In a letter to the Trump administration last week, 661 companies warned that further tariffs on China would devastate the economy, predicting the loss of 2 million U.S. jobs and $2,000 a year in added costs for the average American family.

“We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy,” the companies said. “Broadly applied tariffs are not an effective tool to change China’s unfair trade practices. Tariffs are taxes paid directly by U.S. companies … not China.”

The potential fallout from the U.S.-China conflict extends well beyond their respective borders, political leaders and economists say. In a G-20 briefing note, Christine Lagarde, managing director of the International Monetary Fund, warned that the last round of proposed tariffs against China could erase $455 billion in global gross domestic product in 2020.

“There is strong evidence that the United States, China and the world economy are the losers from the current trade tensions,” Lagarde wrote.

But in pre-summit meetings in Japan, U.S. Treasury Secretary Steven Mnuchin insisted the trade war wasn’t dampening global growth or straining the domestic economy.

“I don’t think in any way that the slowdowns you’re seeing in parts of the world are a result of trade tensions at the moment,” he told reporters, the New York Times reported.

The Indian government had been mulling higher penalties on U.S. exports since last summer, after it was hit by Trump’s tariffs on aluminum and steel, but reportedly held back, leaving room for de-escalation through trade talks. Discussions are expected to continue when Secretary of State Mike Pompeo visits India this month.

“We remain open to dialogue, and we hope that our friends in India will drop their trade barriers and trust in the competitiveness” of their own companies, Pompeo said at a U.S.-India Business Council meeting last week, Reuters reported.

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Democrats Hold Out on USMCA as Trump Walks Back Mexico Tariffs

President Donald Trump’s decision not to impose tariffs on Mexico removed one obstacle for Congress to approve his North American trade deal, but his administration has more work to do to smooth the final stages of the accord’s ratification.


Trump accepted Mexico’s offer of tougher immigration enforcement as sufficient to dissuade him from levying a 5% charge on all Mexican imports. The move late Friday deflated tensions with Mexico and, as far as Canada is concerned, clears a path for the U.S.-Mexico-Canada trade agreement to move forward, Canadian Finance Minister Bill Morneau said Sunday on Bloomberg TV.

That leaves House Democrats as the last major stakeholders still to get on board. Speaker Nancy Pelosi’s decision on when (and whether) the deal will get a vote depends on talks with the Trump administration to address Democrats’ concerns, according to a senior Democratic aide.

“We’re not ready,’’ Representative Debbie Dingell, a Michigan Democrat, said Sunday on Fox News. “The votes in the House are not there yet until these changes take place.’’

During last week’s uncertainty over trade with Mexico, most Democrats publicly separated USMCA deliberations from Trump’s tariff plan, which means that removing the tariff threat doesn’t necessarily clear the way for a new deal to replace the North American Free Trade Agreement. Dingell said she wants changes to the agreement’s labor, environmental and enforcement provisions that would satisfy her skeptical colleagues.

Deciding against the Mexican tariffs does, however, help the president with his own party — especially in the GOP-led Senate. South Dakota Senator John Thune, the chamber’s second-ranking Republican, said Monday he sees a clearer path forward for the North American trade deal now that tariffs are off the table.

“It feels like the near-term issues have been resolved, and I hope it removes uncertainty about getting USMCA voted on,” Thune said. “I feel good about that.”

Revamped Nafta

Finance Committee Chairman Chuck Grassley of Iowa warned last week that the USMCA — Trump’s top legislative priority this year — would be in peril if the president went ahead with the Mexican tariffs.

House Republicans for weeks have said the revamped trade deal, which updates but doesn’t fundamentally alter the decades-old NAFTA, would pass the House if only Pelosi would put it on the floor. Louisiana Representative Steve Scalise, a top member of GOP leadership, renewed that call Friday after Trump said he won’t impose tariffs on Mexico, lauding the breakthrough that “puts us in a better position to make USMCA a reality.”

The lawmaker working groups that Pelosi appointed to negotiate with U.S. Trade Representative Robert Lighthizer are beginning to drill down on the details of how to resolve Democrats’ outstanding issues, according to the aide, who asked not to be identified when talking about internal discussions.

Pelosi has repeatedly said that her members “want to get to yes,” but only if the agreement resolves their doubts. Democrats have pushed Mexico to pass and swiftly implement labor reforms that would, among other things, allow workers there to vote for union representation with a closed ballot.

2020 Timing

Trade in general has become a complicated ideological and electoral issue since Trump in his 2016 campaign denounced Nafta as the worst example of globalism run amok with little regard for U.S. workers. Trump’s position sets him apart from free-trade Republicans, and it also creates a dilemma for 2020 Democratic candidates. Democrats traditionally have been more skeptical than Republicans when it comes to free trade.

The 2020 presidential race also squeezes the timing for a vote on the bill to implement the USMCA. Lawmakers of both parties have warned that passing such a deal will be politically tricky in an election year. That means the best chance for a vote would be before Congress recesses in August to avoid typical end-of-the-year budget fights, according to North Carolina Representative Mark Meadows, a close Trump ally.

“Hopefully, we can get together and make sure that happens in the latter part of July,’’ Meadows said on Fox News’s “Sunday Morning Futures.’’

Even amid rising tensions from Trump’s tariff threat, Mexican President Andres Manuel Lopez Obrador has reaffirmed his support for the new Nafta deal. Its prospects in Mexico’s Congress are good, given the support of Lopez Obrador, whose party controls the nation’s legislative branch. Major opposition parties also want it to be enacted.

Nonetheless, the tariff confrontation may have created lasting damage to ties between the two countries. Republicans previously pleaded with Trump to remove steel and aluminum tariffs on Canada and Mexico, and they’ve publicly worried about the lasting impact of changes to global commerce as a result of Trump’s multi-front trade wars.

Even as Trump retains some bipartisan support for taking a hard stance against Chinese trade practices, few lawmakers wanted him to rip up the accord with Mexico and Canada without a replacement. The USMCA came together after more than a year of painstaking negotiations.

Senator Thom Tillis, a North Carolina Republican who’s up for re-election in 2020, said he has “no doubt’’ there’s enough support in the Senate to ratify the agreement. With help from pro-trade Republicans, Tillis said Sunday on Fox, the Democratic-led House should be able to pass it as well.

“Now that we’ve gotten the threat of tariffs out of the way, I hope that Speaker Pelosi will put that on the House floor,’’ he said.

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A NAFTA that works for workers

The North American Free Trade Agreement has been a disaster for working Pennsylvanians. But, the way it came about was no accident.


Those in power decided that greed, not justice or fairness, would be the rule of our economy. Corporations were handed free rein to suppress the rights of workers in Mexico, slash wages across North America and destroy livelihoods here at home — anything to fatten their already burgeoning profit margins.

For the past 25 years, we have witnessed the capacity of shameless politicians and greedy executives to wreak havoc on working people. We have watched families reel from the closing of a plant at the heart of their community. We have seen our parents and grandparents scramble to survive as their pensions are sacrificed to reassure shareholders. Day after day, the fruits of our labor have has been sold out to enrich those with the most.

President Donald Trump won Pennsylvania in large part by calling out this rigged system. But, his proposed new NAFTA doesn’t live up to the massive structural problems facing our country.

Something needs to change, but working people can’t afford to settle for rebrands or soft-footed reform. We won’t accept tweaks around the edges. NAFTA needs to be ripped out by the roots and replaced with something dramatically different.

A truly pro-worker trade deal will do more than minimize collateral damage. It will prioritize the needs of working people over the demands of a few CEOs. And, it will put us in a stronger position for the future by using the United States’ leverage to strengthen our rights at work, raise wages and create good jobs.

As it stands, the president’s proposal would waste a massive opportunity to usher in a new era of American trade policy. It leaves in place some of the worst parts of NAFTA while handing pharmaceutical companies even more power to set exorbitant drug prices. Working people are demanding better.

First, the administration needs to dramatically strengthen the deal’s enforcement provisions. In the current draft, when corporations break the rules, they will have the power to block any investigation into their actions. Negotiators had gotten rid of this loophole in recent trade agreements, so to turn back now is an absurd concession and a total non-starter for the labor movement. It doesn’t matter what the proposed new NAFTA offers in theory; without a way to hold multinational corporations accountable, this deal isn’t worth the paper it’s written on.

Second, the administration needs to use this opportunity to free patients from the skyrocketing cost of prescription drugs. The current proposal does precisely the opposite, granting Big Pharma a continent-wide, decade-long monopoly that would prove disastrous for working people in all three countries.

Third, Mexican workers must be guaranteed the right to organize, negotiate higher wages and win acceptable working conditions. While the Mexican government has taken steps in the right direction, this proposal has no way of ensuring that they continue following through on their promises. This deal needs to mandate transparent reporting and strong, guaranteed consequences for violations. So far, the new NAFTA has no mechanism for ensuring any meaningful change. To move forward without effective enforcement and monitoring tools would sacrifice any leverage we have to save jobs in Pennsylvania and strengthen workers’ rights on both sides of the border.

These are the most egregious issues, but there is a range of other problems with the current proposal that also need to be addressed, from allowing corporations to hide the origins of our food to leaving high-wage jobs vulnerable to continued outsourcing.

Simply put, we won’t allow the next generation to suffer the same injustices of the past quarter-century. If the administration insists on rushing its flawed agreement without these common-sense improvements, our movement will mobilize an unrivaled, nationwide organizing network to ensure that it never sees the light of day. But if President Trump can deliver on these changes and produce a truly pro-worker deal, we are ready and eager to win its passage in Congress.

Either way, this process will be driven first and foremost by the voices of working people. That’s why we’re hosting a workers’ town hall Monday in Pittsburgh, where we will hear from the Pennsylvanians who have suffered through NAFTA’s devastation. These workers are demanding something better, and they’re prepared to fight for it.

We suggest the White House listen to what they have to say.

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Trump’s North American trade deal must do more to protect US jobs, House Democrat says

Mexico didn’t foist NAFTA on the United States, despite President Donald Trump’s constant claims that the U.S. loses “so much money” on the deal. We did it to ourselves, and we did it deliberately.


Corporations wanted to create in Mexico a low-wage haven where they could shift production, expecting us to happily buy the imported goods built with cheap Mexican labor—while exporting our jobs.

Trump’s new trade pact, the United States-Mexico-Canada Agreement, includes sweetheart deals for the oil, gas and pharmaceutical industries that create huge problems for consumers. But it also perpetuates the original NAFTA’s core problem, the one the president himself has talked about most: shifting U.S. production to Mexico.

If Mr. Trump is unwilling to tackle the central flaw of what he has called “the worst trade deal in history,” his won’t be any better.

Before NAFTA, we did not have a significant trade deficit with Mexico. In the NAFTA world, we have run a stubborn $100 billion deficit year in, year out. According to the Economic Policy Institute, by 2013 NAFTA had displaced 852,000 U.S. jobs, mostly in the manufacturing sector.

How bad is it right now? Let’s focus on autos, the biggest sector overall and the one most important to Michiganders. U.S. auto imports from Mexico continue to break records, doubling between 2011 and 2018. They jumped again in the first quarter of this year. In total, four-fifths of cars that Mexico exports are exported to the U.S.

When manufacturers—like General Motors in Warren, Michigan—close up shop to move plants to Mexico, there are fewer jobs for American workers. And where opportunities do exist, wages must compete with the $1-$2 per hour wages in Mexico. GM now makes nearly a quarter of the cars it sells in the U.S. in Mexico, and that number is only poised to grow.

We can protect American workers by stopping the flow of U.S. jobs south of the border. But to do that, any new trade regime must raise the standard of living for Mexican workers. The deeply entrenched Mexican system of fake unions and so-called protection contracts must be replaced by real worker power through authentic unions and actual collective bargaining.

A new Mexican law stipulates that the protection contract system will end, and all workers will be allowed to vote for authentic unions and bargain freely. They say they will reopen all protection agreements within four years. On the one hand, one might say four years is a long time to wait for justice. On the other, how could a country with Mexico’s resources facilitate what is estimated to be hundreds of thousands of new elections and contract negotiations in four years?

The infrastructure and resources are simply not there. The U.S. National Labor Relations Board oversaw 1,250 elections in 2018. How can we expect Mexico to oversee many times that many cases, in more complicated circumstances, with far fewer resources?

On top of that, sadly, the first real-world efforts by Mexican workers to exercise their rights since the passage of the labor law reform showed overwhelming evidence of corruption and intimidation.

If things continue this way, the suppression of wages in Mexico is likely to continue unabated. But the president can change that. He can reopen the United States-Mexico-Canada agreement and set higher standards to protect workers’ rights and put a stop to the shockingly low wages that corporations have exploited for too long.

The president has made the premature and short-sighted decision to begin the administrative process to seek Congressional approval of his trade deal. That’s on top of the reckless announcement of his intention to place tariffs on Mexican goods as retribution for migrants passing through the country.

These actions reek of a political fight that’s more about energizing partisans than protecting American jobs. If he is serious about ending the steady flow of U.S. jobs to Mexico and winning approval from Members of Congress whose votes he needs, he will reopen the agreement and make sure that good jobs stay in America.

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Canada begins process to ratify new NAFTA: report

Canadian Prime Minister Justin Trudeau on Monday notified the country’s lawmakers he intends to bring forward legislation to ratify United States-Mexico-Canada Agreement (USMCA), the deal that replaces the North American Free Trade Agreement (NAFTA), Bloomberg News reported.


Foreign Minister Chrystia Freeland introduced a “ways and means” motion in the House of Commons, the first step to getting the deal approved by parliament.

Trudeau said last week that he was eager to complete a deal, according to Bloomberg.

Vice President Mike Pence is scheduled to meet with Trudeau in Ottawa on Thursday to discuss advancing the agreement.

The U.S. earlier this month reached a deal to lift steel and aluminum tariffs on Canada and Mexico, removing a significant roadblock to domestic approval of the USMCA. Canadian and Mexican officials have now indicated they will ratify the agreement.

Congressional Democrats, however, have said involved parties must tighten labor and environmental standards before passage in the U.S.

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