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"There is no question, of course, that this trade agreement is much better than NAFTA," House Speaker Nancy Pelosi, D-Calif., said at a press conference announcing her caucus's support of the agreement. Major U.S. stock indexes turned positive after the announcement.
U.S. Trade Representative Robert Lighthizer, White House senior adviser Jared Kushner and Canadian Deputy Prime Minister Chrystia Freeland are expected to be in Mexico City on Tuesday for a signing ceremony.
The deal must now be ratified by all three countries. A House vote, delayed as Democrats fought to improve enforcement mechanisms after winning a majority in the chamber in November 2018, is slated for next week. The modifications had delayed Congressional approval, raising the possibility that the deal might not be ratified this year since Congress adjourns Dec. 20, and prompted criticism from President Trump and his allies.
“Every once in a great while you get to participate in an ‘it will never happen moment,’” said House Ways and Means Committee Chairman Richard Neal, D-Mass. “We are witnessing that today.”
Congressional passage of the agreement "will be a significant win for farmers, workers and all Americans," said Sen. Chuck Grassley, the Iowa Republican who chairs the chamber's Finance Committee. "Renegotiating NAFTA was a central campaign promise made by President Trump. He kept his word and Americans will enjoy the many benefits of this upgraded trade deal as a result."
Approving the agreement gives House Democrats, particularly those from more conservative districts, a useful talking point when they head home for the holidays. Many had been reluctant to face voters with few legislative achievements beyond impeaching the president, and Pelosi emphasized the deal's importance to American workers.
USMCA "will be the best and most important trade deal ever made by the USA," President Trump tweeted Tuesday. Vice President Mike Pence said the Democrats' move is a victory for Trump's policy and shows Pelosi and her caucus acquiescing "to the voice of the American people."
The USMCA, which overhauls the Clinton-era North American Free Trade Agreement, commonly known as NAFTA, requires 75 percent of automobile components be manufactured in the United States, Canada and Mexico in order to avoid tariffs, and that 40 to 45 percent of automobile parts be made by workers who earn at least $16 an hour by 2023.
"More than 12 million American jobs depend on our $1.4 trillion trading relationship with Canada and Mexico, and USMCA will strengthen this trade relationship," said Tom Linebarger, CEO of engine-maker Cummins Inc. and chairman of the Business Roundtable's trade and international committee. The Roundtable represents the CEOs of the 200 largest U.S. companies.
The deal, endorsed by the AFL-CIO labor union, will also safeguard international markets for U.S. growers, who have been struggling with adverse weather conditions and the loss of many of their Chinese buyers.
“It will deliver a measure of certainty farmers badly need right now," said Angela Hofmann, co-director of the advocacy group Farmers for Free Trade. "Now it’s time to get the bill passed before politics can get in the way. Farmers and ranchers will be watching closely to ensure that their members of Congress are standing up for American agriculture."
USMCA is expected to create “north of 176,000 new jobs” and inject $34 billion into the U.S. auto industry, Commerce Secretary Wilbur Ross told FOX Business' Maria Bartiromo, citing International Trade Commission data. He added that as many as 589,000 new jobs could be created within five years.
“Every day that it isn't approved is a day delayed and the benefits to America," Ross said.