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USMCA update by the Canadian Chamber of Commerce

February 26, 2019   (0 Comments)
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Below is a summary on the USMCA (United States Mexico Canada Agreement) update by the Canadian Chamber of Commerce.


-The Canadian Chamber of Commerce was in Washington to discuss the ratification of USMCA. They met with trade officials at the Canadian embassy, their counterparts at the US Chamber of Commerce as well participating in meetings with some US officials. Here are some of the insights from these meetings.


Unclear Ratification Process in the US.

-The change of landscape in the US Congress is making the path to ratification unclear. The Democrats have issues with the enforcement of the labour requirements in the agreement and also the intellectual property clauses for pharmaceutical companies. They are requesting adding side letters to the deal for these particular issues. According the Canadian Chamber of Commerce, this complicate the ratification process greatly.  If the Democrats are able to open the deal, it will also provide an opportunity for Republicans to bring forward some items they did not get in the deal.


Pressure is growing for the removal of Steel and Aluminum tariffs in the US.

-It has become a bipartisan issue, both democrats and republicans are calling on the President Trump to lift the steel and aluminum tariffs. Essentially, because it is hurting the American economy, affecting jobs and the US businesses are very concerned. The retaliatory tariffs by Canada and Mexico is negatively impacting some US industries.

-It also appears that the US President made a promise to Prime Minister Trudeau to lift the tariffs if the USMCA deal was reached. Many US trade officials have made similar comments.

-Even Robert Lighthizer, US Trade representative,  is for a lift of the tariffs.

-The US Chamber of Commerce is pressing really hard. They will not support a trade deal ratification until the steel and aluminum are completely removed by all parties.


Ratification in Canada

-The government has started the ratification process. The CUSMA text was tabled before Parliament on December 13th and the process calls for 21 sitting days after tabling before a ratification bill is introduced.

-The government position now is that they will not ratify the deal until they know what changes would be brought the US Congress.

-This creates a timing issue since it is an election year in Canada and Parliament will not be sitting basically from June 2019 to January 2020.