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When will USMCA be ratified?

NAFTA’s replacement trade agreement with Canada and Mexico remains shelved – for now.

On Tuesday, President Donald Trump sent a letter to House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urging Democrats to pass the USMCA trade deal, which will replace 1994’s NAFTA agreement, once it is enacted.

“Before we get to infrastructure, it is my strong view that Congress should first pass the important and popular USMCA trade deal,” he wrote.

Negotiations have been ongoing among the U.S., Canada and Mexico since 2017. Last November, Trump, along with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto, signed the agreement. However, legislatures from the three countries still need to ratify the deal.

According to the Senate Republican Policy Committee: “There is no deadline for the administration to send Congress a draft statement of administrative action and a copy of the final legal text of the USMCA. However, once it is submitted, that triggers a strict timetable that would see the bill through to a vote on final passage.”

The RPC outlines a general timeline here.

So what’s the holdup at this point? According to Rick Dearborn, executive director of the Pass USMCA Coalition (a group of trade associations and business advocating for the deal), the biggest hurdle to implementation was actually removed earlier this week when Trump signaled the U.S. would remove steel and aluminum tariffs.

Beyond that, “an exact timeline is difficult to figure out,” Dearborn says, noting that Pelosi wants to bring USMCA to a vote but not before addressing some additional labor and environmental issues. The deal will obviously need bipartisan support, but Dearborn thinks most Republicans and enough Democrats are on board to make it happen.

“The good news is, they have plenty of time to do something,” he adds.

The Ways & Means and Finance committees could get aggressive in June if they’ve pre-negotiated everything properly, Dearborn says. Even if they drag their heels, a deal could still be inked by September – but it’s possible that could happen before Congress’s August recess, he says.

“The current hang-ups are solvable,” he says. “And the end result will be a better deal than NAFTA in almost every way.”

For the agriculture industry, that means leveling the playing field for important farm commodities such as dairy, poultry and wheat, Dearborn says. And more broadly, USMCA modernizes technological issues that NAFTA never addressed regarding the Internet, intellectual property and more.

“A lot of things have happened in the last 20 years,” he says. “The nature of our very economy has changed. This is a chance to get everything updated by keeping what’s good about NAFTA and enhancing the rest.”

For now, the waiting continues. But as soon as the White House submits a draft statement of administrative action, a “30-day clock” starts counting down to when legislation can be sent to Congress and voted upon. Meetings earlier this week among key members of Congress and U.S. Trade Representative Robert Lighthizer are signs that momentum may be ramping up. And some Senators, including Rob Portman (R-OH), are optimistic that current negotiations are “productive and in good faith.”

Time will tell.

TAGS: Trade
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