Trump signs off on USMCA, shifting focus, pressure back to House of Commons

The signing leaves Canada as the only member of the trilateral deal still to ratify the agreement, a process that began almost on cue as Deputy Prime Minister Chrystia Freeland, who presided over the negotiations as foreign affairs minister, introduced a Canadian version of the bill in the Commons.

“The new NAFTA is a victory for all Canadians, of every political view, and in all regions of the country,” Freeland said in a statement Wednesday.

Earlier Wednesday, the Bloc Quebecois voted against a motion to make way for the bill. The motion carried their support.

“Various industries, various groups have questions and concerns,” Prime Minister Justin Trudeau said before his weekly Liberal caucus meeting.

“There will be a certain amount of pressure on Canada from both Mexico and the United States, who want to see this move forward, but we have questions and we have a process for ratification. I just look forward to getting through it responsibly and rapidly, because it’s so important to Canadians.”

The 13 months of negotiations, which began in 2017, put pressure on Canada’s relationship with its largest trading partner. Trump, an outspoken critic of NAFTA, mentioned Trudeau only once Wednesday, acknowledging his “close partnership and co-operation” while in the same breath hailing an “incredible friendship and relationship” with Mexican President Andres Manuel Lopez Obrador.

“Canada’s opening up,” he said, promising substantially higher exports of U.S. poultry, eggs and wheat to Canada.

“Where is the Canadian folks, where are they?” he asked, peering in the crowd. “You guys did a good job on us before this deal, I’ll tell you. Canada was very tough. But they’re good. They’re our friends, so we appreciate it.”

The USMCA — christened in Canada as CUSMA but known more widely simply as “the new NAFTA” — is expected to feature prominently in Trump’s re-election efforts, which is why House Democrats were also clamouring to take a share of credit.

“We rescued the final NAFTA 2.0,” said Oregon Rep. Earl Blumenhauer, touting Democrat efforts to negotiate more stringent labour and environmental enforcement mechanisms. “We now have an agreement that will be worth the paper it is printed on.”

USMCA “can’t undo the damage” wrought by the 26-year-old NAFTA, but the changes negotiated by Democrats earned her support, added Rep. Debbie Dingell, who blames free trade for hollowing out the auto sector in her home state of Michigan.

“Our work is just beginning to strengthen U.S. manufacturing … it sets a floor from which we will fight.”

Even once Canada passes the needed legislation, it will still take several months before the new rules are fully in place. All three parties need the time to develop so-called “uniform regulations” used to interpret the terms of the deal.

Once that happens, a welcome measure of predictability and confidence will return to the continental trade corridor, said Kirsten Hillman, Canada’s acting ambassador to the U.S., who was on hand for Wednesday’s ceremony.

“Trade agreements as public policy tools do two things: they open markets and liberalize trade between parties so as to incentivize mutual benefits — supply chains, investment, business partnerships — and they create predictable rules that Canadians can count on in deciding to make business choices,” Hillman said in an interview.

“One of the challenges over the past couple of years has been that this instrument that underlines and underpins a $2-billion-a-day trading relationship we have with the United States has been under negotiation, creating a certain sense of instability within our trading community.”

The Democrat changes commit Mexico to a suite of changes that include protections that would allow workers to organize, form and join the union of their choice, among other measures.

“In my view, the labour reforms being undertaken in Mexico are the largest labour reforms ever undertaken in North America, including the New Deal in the U.S.,” said Dan Ujczo, an international trade lawyer and U.S.-Canada expert with Dickinson Wright in Columbus, Ohio.

“It is a huge undertaking, and so every Canadian and U.S. company that has operations in Mexico had better get ready for a significant adjustment period on labour and employment issues in Mexico.”

Hillman said a Canadian delegation, part of a working group to support the implementation of those reforms, is in Mexico this week to determine precisely how Canada can help.

“I’m not saying it’s going to be easy, but I think these obligations are very much something that are very consistent with the policies and objectives of the Mexican government.”

Trump signs off on USMCA, shifting focus, pressure back to House of Commons

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