/Trump signs USMCA, leaving Canada as the last country yet to ratify North American trade deal

Trump signs USMCA, leaving Canada as the last country yet to ratify North American trade deal

U.S. President Donald Trump signed the new North American trade pact into law Wednesday, leaving Canada’s Liberal Party to shepherd the agreement through a final period of debate in the House of Commons to secure ratification.

Deputy Prime Minister Chrystia Freeland, who guided Canada through nearly two years of fractious talks to secure the trilateral pact, is expected to kick start that process this week when she introduces legislation in the House.

Giving a nod to the “long, complex” negotiations, Trump highlighted the increased access to Canada’s dairy and poultry market included in the deal, as well as U.S.-sought changes to the Canadian wheat grading system.

“You guys did a good job on us before this deal, I’ll tell you,” he said, during an extended ceremony on White House’s South Lawn. “Canada is very tough, but they’re good. They’re our friends so we appreciate it.”

The signing ceremony for the revamped trilateral pact — dubbed the United-States-Mexico-Canada agreement or “USMCA” by the White House — came after U.S. Trade Representative Robert Lighthizer negotiated a series of last-minute amendments on pharmaceutical provisions, labour reform and the environment in order to win the support of Congressional Democrats.

As such, the new NAFTA represents a rare bipartisan achievement for the White House, though Trump, currently battling impeachment in the U.S. Senate and preparing for a re-election campaign, made no mention of the Democrats in his speech. Members of the party were also left off the invitation list for the ceremony, despite their role in clinching the deal.

“Mexico and Canada agreed to new labour protections that my administration negotiated,” Trump said, later adding, “This is something we really put our heart into. It’s probably the number one reason I decided to lead this crazy life I’m leading right now, as opposed to that beautiful, simple life of luxury that I led before this happened.”

With Canada now the last country yet to ratify the deal, all eyes will be on Prime Minister Justin Trudeau’s minority government to win the support of opposition lawmakers.

The Bloc Québécois and NDP have questioned the lack of specific labour protections in the deal. They’ve also objected to the omission of Canadian aluminum from a last-minute provision requiring all steel used in auto manufacturing to be “melted and poured” in North America in order to receive preferential tariff treatment. The Conservatives have not threatened to hold up the deal though they have said they would like to examine it in detail.

“Various industries, various groups have questions and concerns,” Trudeau said in Ottawa. “It’s important we all work together in the House to move forward on this. 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.”

Various industries, various groups have questions and concerns

Prime Minister Justin Trudeau

The agreement will likely be tabled in parallel with implementing legislation making necessary tweaks and changes to Canadian law, said Lawrence Herman, an international trade lawyer at Herman & Associates. The legislation will go through three readings and be debated by both the House trade committee and the Senate before receiving royal assent by Governor General Julie Payette. Only then can Trudeau and his cabinet ratify the deal, Herman said.

“The Liberals could fast-track the legislative process if they had a majority but they don’t,” said Herman. “It remains to be seen what will happen but I expect it to take six weeks or maybe longer for the process to unfold.”

The new NAFTA won’t come into force until the first day of the third month, or roughly 90 days, after the final country, Canada, serves notice that it’s ready to proceed. All three countries will use that time to meet certain obligations outlined in the deal, including labour reforms and changes to auto rules that determine which cars qualify for preferential tariffs. Of those, the Mexican labour reforms demanded by Democrats — calling for free and secret votes for labour unions and a new system of independent courts to oversee labour disputes — are likely to be most closely watched.

But in the meantime, all parties will be waiting for the deal’s approval in Canada.

“I anticipate the Conservatives will ultimately vote for it, but until it’s done, it remains the government’s number one priority,” said Meredith Lilly, the Simon Reisman chair at Carleton University’s Norman Paterson School of International Affairs. “They do have to manage it carefully and they can’t just turn the page and say this is over now. So they’re going to have to really focus and pay attention to debate and give committees time to discuss it so they ensure they are shepherding this through in a responsible way.”

With files from wire services

Financial Post

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