The U.S. Mexico Canada Agreement (USMCA) does not affect U.S. drug prices, does not limit Congress’ ability to modify domestic law and deserves bipartisan support, says a former trade official in the Obama administration.
Miriam Sapiro was deputy and then acting U.S. trade representative from 2009 to 2014. She has become a senior adviser to the Pass USMCA Coalition.
In an Aug. 27 white paper, she discusses objections to USMCA, how they are based on misconceptions and concludes USMCA is consistent with congressional directives and prerogatives as outlined in the 2015 Trade Promotion Authority legislation.
Sapiro notes that USTR Robert Lighthizer and a group established by House Speaker Nancy Pelosi, D-Calif., are working to resolve issues, and Congress may act on USMCA this fall.
The trade agreement was negotiated by the Trump administration with Mexico and Canada to replace the North American Free Trade Agreement, ratified under President Bill Clinton.
“NAFTA was an important agreement for its time. It helped grow the economies of the U.S. as well as Canada and Mexico while strengthening regional integration and competitiveness to unprecedented levels. But the world has changed since that agreement was negotiated in the early 1990s, and USMCA includes important updates,” Sapiro wrote.
Sapiro's paper responds to concerns that the agreement's intellectual property protections for advanced "biologic" medicines will raise U.S. drug prices.
"USMCA does not affect U.S. drug prices because it does not change rules that affect how the U.S. pharmaceutical market operates," she writes.
Sapiro also says the idea that USMCA might limit congressional ability to modify domestic law is incorrect.
"Trade Promotion Authority ... requires the U.S. trade representative to negotiate trade agreements that reflect America's high standards across the board, including with respect to intellectual property protections," she wrote. "If lawmakers have concerns with existing U.S. laws, they can work to change those laws at any time, regardless of whether there is a trade agreement in place."
She further writes: “Seeking to withhold approval of a trade agreement that has significant benefits for all three economies would not be an effective or appropriate way to suggest changes to U.S. law.”
She concludes: “With USMCA, USTR has negotiated a trade deal that is consistent with Congress’ directives and prerogatives, and it deserves bipartisan support. The intellectual property chapter of USMCA does not require any changes to U.S. law, including with respect to data protection. And nothing in USMCA would constrain Congress’ authority to change U.S. law in the future.”