On November 6, 2018, in the mid-term elections, Democrats took control of the U.S. House of Representatives by winning approximately 39 seats previously held by Republicans. With Democrats taking over control of the House in January and the strong continued focus of the Trump Administration on trade, trade policy issues are likely to feature prominently in the new Congress. In particular, the new Democratic majority in the House is expected to try to have a stronger impact on the development of the Administration’s trade policies and initiatives, including:
• Approval and implementation of the U.S. Mexico Canada Agreement;
• Proposed bilateral trade agreements with Europe, the United Kingdom, and Japan; and
• Development of new trade initiatives by the Administration.
Because of the changeover in control of the House, there will be significant changes in the leadership of the key House Committees overseeing trade issues. In particular, the House Ways & Means Committee will likely be chaired by Rep. Richard Neal (D-MA) and the House Energy & Commerce Committee will likely be chaired by Rep. Frank Pallone (D-NJ). Because Committee chairs in the House possess unilateral subpoena authority under current House rules, Reps. Neal and Pallone (and the Democrats on these Committees) will be able to exercise a significant degree of oversight over the White House on trade issues. Indeed, Democratic leaders in the House have made clear that they plan to aggressively exercise oversight of the current Administration and individual agencies.
At this point, it is unclear how cooperatively Democrats in the House will work with the Administration on trade. Although one might expect that Democrats in the House would be more sympathetic to many of the President’s trade initiatives than their Republican colleagues, it is unlikely that House Democrats will move quickly to pass legislation to implement the United States-Mexico-Canada Agreement (“USMCA”), the new agreement that will replace the North American Free Trade Agreement, because quick approval of the USMCA would provide President Trump with a legislative “win” on one of his signature issues.
It is likely that Democrats in the House will, instead, look to enhance the USMCA’s existing labor and environmental provisions before agreeing to vote on the trade agreement and its implementing legislation. Rep. Nancy Pelosi (D-CA) -- who is expected to re-claim her position as Speaker of the House in January 2019 -- has signaled that enforcement of these provisions will be necessary before the agreement is approved by the House. It is possible, moreover, that Democratic leadership in the House could prioritize healthcare or immigration policy initiatives before taking up the USMCA in the next legislative session. As a result of their concerns over this process, several Republican senators are pushing for consideration and approval of the USMCA during the current “lame duck” session of Congress.
The changeover in control will likely result in increased Congressional oversight of other trade issues. Rep. Bill Pascrell (D-NJ), who is expected to chair the Ways & Means Subcommittee on Trade in the next Congress, has expressed a desire to impose greater transparency over the Administration’s tariff setting processes and to re-assert Congress’s role in setting trade policy. Among other things, there is a strong possibility that Congress will convene oversight hearings regarding USTR’s efforts to pursue bilateral trade agreements with the European Union, the United Kingdom, and Japan.
Moreover, considering his past statements on the issue, Rep. Pascrell is expected to probe the President’s rationale for imposing tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act of 1962 (“Section 232”). Other Congressional stakeholders have expressed concern about the tariffs imposed by the Trump Administration on Chinese imports under Section 301(b) of the Trade Act of 1974 (“Section 301”). In sum, it can be expected that the new Democratic majority in the House will seek to assert a much greater role in the development of trade policy over the next two years.
