U.S. trade envoy meets lawmakers on U.S.-Mexico-Canada deal as time runs short

WASHINGTON (Reuters) - U.S. Trade Representative Robert Lighthizer met this week with Democratic lawmakers to try to resolve their concerns about the U.S.-Mexico-Canada (USMCA) trade agreement as Republicans increased pressure to get the deal passed by the end of 2019.

FILE PHOTO: U.S. Trade Representative Robert Lighthizer testifies before a Senate Finance Committee hearing on "The President's 2019 Trade Policy Agenda and the United States-Mexico-Canada Agreement" on Capitol Hill in Washington, U.S., June 18, 2019. REUTERS/Leah Millis

Democrats said they were making progress every day, rejecting criticism from U.S. President Donald Trump and some Republicans who have accused them of stalling a vote on the deal that replaces the 1990s-era North American Free Trade Agreement (NAFTA).

Lighthizer and other U.S. trade officials met on Wednesday with a working group of Democrats in the U.S. House of Representatives, according to three sources familiar with the matter.

Lighthizer also met with Republicans on the House Ways and Means Committee, said one of the sources. In addition, his staff met with congressional staff on Monday and Tuesday, according to two of the sources.

The U.S. Trade Representative’s (USTR) office did not immediately comment.

Despite the positive signals, Senate Finance Committee Chairman Chuck Grassley, a Republican, said in a speech on the Senate floor that he feared the Democratic-controlled House was “increasingly less likely to act this year on USMCA.”

He said Democrats appeared to be stalling to avert handing any victory to Republican Trump, but added that failure to act could cost them votes in the 2020 elections.

Delaying a vote on the deal could ultimately derail it since little legislation is likely to be finalized in a presidential election year.

Republicans argue the trade pact would create hundreds of thousands of jobs, protect U.S. industries, and boost investment in the United States.

Democrats have said they are committed to working toward approval, but need their concerns over labor, climate and enforcement to be addressed first.

The Democratic working group and staff were working constantly with USTR to resolve outstanding difference, said Erin Hatch, spokeswoman for the House Ways and Means committee.

“This is an honest, diligent effort to reach an agreement that meets Democrats’ standards, and every day we are making progress,” she said.

Separately, a bipartisan group of 130 members of Congress urged Lighthizer to cut a footnote in the trade agreement that suggests Washington could drop its $800 de minimis threshold - the value below which imported goods are free of both sales tax and duties - to match those of Canada and Mexico.

As part of the USMCA, Canada and Mexico both raised their de minimis thresholds, aiding consumers and small businesses in the United States, but those levels will remain well below the U.S. level of $800, the highest in the world.

U.S. technology groups have said that lowering the U.S. threshold would undermine the broader gains of the deal.

Reporting by Andrea Shalal; Additional reporting by Richard Cowan; editing by Grant McCool