House Speaker Nancy Pelosi and the Trump administration agreed Tuesday to a rewrite of the 25-year-old North American Free Trade Agreement, with Democrats announcing the breakthrough minutes after they called President Trump a threat to democracy who must be impeached.
Mrs. Pelosi, who weathered months of arm-twisting from Republicans, said Democrats had secured enough wins on labor standards, pharmaceuticals and the environment to rally behind the U.S.-Mexico-Canada Agreement, or USMCA.
“There is no question that this trade agreement is much better than NAFTA. But in terms of our work here, it is infinitely better than what was initially proposed by the administration,” said Mrs. Pelosi, California Democrat.
Mr. Trump made the USMCA his top priority after pledging in 2016 that he would renegotiate trade deals stacked against American workers. For months, he said the revamp of NAFTA that he negotiated a year ago would fulfill that promise but that “do-nothing Democrats” were too consumed by hatred of him to vote on it.
Yet Democrats and their labor union allies held out for a series of concessions from the eager president. They said they got what they wanted — most notably, ways to enforce the deal and stiffer labor standards in Mexico so American workers aren’t undercut.
“We’re ready to rock ‘n’ roll,” said Rep. Henry Cuellar, Texas Democrat. “This is good for us, this is good for Canada. It’s good for the region, it’s good for Mexico.”
Mr. Trump, who is eager to tout the accomplishment on the campaign trail, said the breakthrough was a “silver lining” to a day that began with articles of impeachment filed against him. He said the speaker probably decided to move on trade because she was embarrassed by the impeachment drive.
“She did it on the same day that they announced they are going to impeach the 45th president of the United States and your favorite president,” Mr. Trump said at a rally in Hershey, Pennsylvania. “It’s a huge deal and it plays down the impeachment.”
Vice President Mike Pence said Mrs. Pelosi finally acquiesced to a vote on the House floor, and House Minority Leader Kevin McCarthy, California Republican, suggested that Democrats harmed the nation’s economic progress by waiting so long.
The tables appeared to turn by afternoon, however, when Senate Majority Leader Mitch McConnell, Kentucky Republican, said his chamber won’t take up the deal until after the holidays and Mr. Trump’s likely impeachment trial.
House Democrats said they didn’t understand the delay.
“If they go home without passing USMCA, it is a major political liability,” said Drew Hammill, Mrs. Pelosi’s deputy chief of staff.
White House press secretary Stephanie Grisham said the administration expects Congress to approve the deal swiftly, even though Mr. McConnell suggested it may slip into January.
“It is long overdue for Congress to take up the USMCA, and we expect to push hard on passing the implementing bill before the end of the year,” she said.
Members of both parties have spoken for years about replacing the 1994 NAFTA deal, which has been blamed for U.S. job losses as companies sought cheap labor in Mexico and moved production south without facing tariffs or other trade barriers.
USMCA would prevent Canadians from undercutting U.S. dairy farmers on price, ensure that U.S. wheat is graded under the same standards as Canada’s and bar places such as China from dumping metals or other products into the U.S. — duty-free — via a neighbor of the U.S.
The agreement would boost auto production by requiring a greater percentage of vehicle materials to be produced in North America and raise minimum wages for laborers on the assembly line. Digital trade provisions would erase tariffs on items such as Amazon e-books in each of the three nations.
Mrs. Pelosi credited the work of House Ways and Means Committee Chairman Richard E. Neal and AFL-CIO leader Richard Trumka for making improvements in tough negotiations, including the elimination of a provision that maintained patents on expensive “biologic” drugs for at least 10 years.
“This got really hot on a number of occasions,” said Mr. Neal, Massachusetts Democrat. He joked that he hung up on U.S. Trade Representative Robert Lighthizer at times.
Mr. Trumka said the deal isn’t perfect, “but there is no denying that the trade rules in America will now be fairer because of our hard work and perseverance.”
“President Trump may have opened this deal, but working people closed it,” he said. “And for that, we should be very proud.”
Though Democrats and labor appear satisfied, the negotiations alienated some free market groups, which said new restrictions on auto manufacturers were onerous and could hurt consumers.
“The revised agreement reduces uncertainty over the fate of NAFTA and preserves the zero tariffs at its core. But it will also roll back liberalization in the auto sector with its tighter rules of origin, raising prices for U.S. families in the market for a new car or light truck, while reducing sales and exports of the domestic U.S. auto industry,” said Daniel Griswold, a trade scholar at the Mercatus Center.
Sen. Patrick J. Toomey, Pennsylvania Republican, said he plans to vote against the deal. He said it was “designed to diminish trade.”
Republicans from the heartland, meanwhile, said the agreement was long overdue.
“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,” said Senate Finance Committee Chairman Chuck Grassley, Iowa Republican.
Besides Congress, the legislatures of Canada and Mexico must ratify the pact before it goes into effect.
Mr. Trump spoke with Canadian Prime Minister Justin Trudeau on Monday to discuss finalizing the deal, the White House said.
Democrats announced the agreement on the same morning that Mrs. Pelosi and powerful chairmen announced two articles of impeachment accusing Mr. Trump of abusing his power and obstructing Congress.
They say Mr. Trump leveraged a White House meeting and nearly $400 million in military assistance to pressure the Ukrainian president to open investigations of political rival and former Vice President Joseph R. Biden and his son Hunter.
Democrats’ cooperation on trade could be interpreted as cover for centrists who fear backlash back home over the impeachment drive.
Mrs. Pelosi downplayed the idea that she purposefully tied the impeachment announcement to trade. She said the end-of-year session set up a collision of issues.
She said the trade deal could be perishable, so Democrats approved the agreement once they fashioned it to their liking — even as they cast Mr. Trump as a threat to democracy.
“This has a life of its own,” Mrs. Pelosi said.
⦁ Gabriella Muñoz and S.A. Miller contributed to this report.