US trade deal with Mexico, Canada is positive, but not strong enough, Democratic congressman says

Rep. Matt Cartwright said on Sunday that the U.S. trade agreement with Mexico and Canada is a step in the right direction, but needs to be made stronger.

“What I'm looking for is President Trump to indicate that this is not the end of the line,” Cartwright, D-Pa., told “Sunday Morning Futures.” “This is not the deal that he's going to be satisfied with. We want to see President Trump sharpen his pencil and do a better job at helping American manufacturing workers. The current deal doesn't do that.”

Trump, along with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto, signed the deal – called the U.S. Mexico Canada Agreement (USMCA) – at the Group of 20 summit in Buenos Aires on Friday. The new $1.2 trillion trade pact, which still must be approved by Congress, replaces the North American Free Trade Agreement (NAFTA), which was implemented in 1994 between the three countries.

Under the new agreement, the auto industry, for example, will see changes from the previous deal. In order to evade tariffs, 75 percent of autos must be made in the U.S. or Mexico, up from the current 62.5 percent. Also, 40 percent of a vehicle must be produced by workers making at least $16 an hour. Mexican auto parts workers currently make, on average, less than $3.50, while the wage is typically above $20 in the U.S. and Canada.

Still, Cartwright wants more out of the deal, and doesn’t want the trilateral trade agreement to stop at just the automotive sector in America.

“Absolutely every American manufacturing industry should be subject to that,” he said. “I don't mind them trying a pilot program, a test program limited to the auto manufacturing sector, but … manufacturing is not only about automobiles in this country … everything that's made in this country ought to be subject to a better deal.”

But, the Pennsylvania Democrat said his biggest worry is not the trade agreement, but the “sugar high” associated with tax reform signed into law by Trump nearly a year ago, which slashed the corporate tax rate in addition to lowering the federal income tax rates.

“What I'm really worried about with the markets [is] that this tax sugar high that we're experiencing now is going to dissipate,” Cartwright said. “Look, if we head into a recession in this country, that hurts everybody. You know this is a bigger danger to American workers than anything happening with the borders or immigration ... Democrats are not rooting for a recession. We're rooting for success in this country.”