USMCA RATIFIED BY CANADA – BUT LET’S DEAL WITH COVID-19 FIRST
by Craig Turner
If you blinked, you might’ve missed it.
While everyone was focused on COVID-19, we actually had some good news in March, as Canadian Parliament ratified the U.S.-Mexico-Canada Agreement (USMCA), the last of the agreement’s three partners to do so. The USMCA replaces the North American Free Trade Agreement (NAFTA), which has governed free trade in North America the past half-century.
The news was obviously overshadowed by the current global pandemic – in fact, some argue that Canadian Parliament rushed the measure through before going into a social-distancing hiatus – but it’s a milestone that we’ve been avidly awaiting for a long time. That the agreement was ratified before Parliament went into recess speaks to its importance.
Mexico was the first of the three partner nations to ratify USMCA, doing so in June, 2019. The U.S. Congress followed suit in December, 2019.
Why are we such fans?
From WTCBN’s perspective, the criticality of the agreement is less about its specific details than having the three North American partners reading from the same playbook on trade. While we feel the agreement is a good one, offering advantages to each of the three nations, the certainty offered by the collaboration is key. Businesses working throughout North America will be able to more forward more comfortably, knowing that a deal is in place.
Especially here in the bi-national Buffalo Niagara region, where the connection between the U.S. and Canadian economies is in front of us every day, USMCA is welcome news.
What’s Next?
Almost immediately after the agreement’s ratification in Ottawa, U.S. Trade Representative Robert Lighthizer sent notice to Congress of an entry-into-force date of June 1 for USMCA. The announcement was met with some resistance by automotive companies already dealing with supply chain issues caused by concerns over COVID-19, who suggested the timeline was too aggressive.
Earlier this week, a bipartisan group of 19 U.S. senators urged the Trump administration to move the planned start date back, saying the short lead time would add to pressures on U.S. companies due to the spread of the coronavirus. The senators’ letter to President Trump cited the need for both Canada and Mexico to come into compliance with various terms of the agreement, which would be difficult to accomplish given the current shutdowns around the globe.
WTCBN will continue to follow the implementation of USMCA, and provide updates as more clarity becomes available.
Stay safe!
Posted April 1, 2020
