U.S. House breaks, with no new NAFTA tabled for ratification
OTTAWA • Canadians will likely enter a fall election with the new North American free trade deal hanging in the balance, as Prime Minister Justin Trudeau said Monday he’s not rushing to ratify the pact in the face of U.S. political differences.
The Democrat-controlled U.S. House of Representatives began its five-week summer break on Monday without introducing a ratification bill — a scenario Trump and his cabinet worked hard to avoid.
The Democrats want changes to the United States-mexico-canada Agreement, or USMCA. They want to change provisions on labour, the environment, patent protection for drugs and enforcement, and have by all accounts been working hard with Trump’s trade czar Robert Lighthizer to move forward.
“We recognize that there is a difficult partisan context in Washington right now between the Democrats and the Republicans. We have said from the very beginning that we would keep pace with the American process on ratification of the new NAFTA accords,” Trudeau said in Vancouver. “But we will do that in line with the American process when it picks up again this fall.”
Ever-ticking political clocks in both countries mean U.S. lawmakers — with one eye towards Trump’s 2020 re-election bid — won’t be in a position to take even the most tentative steps forward on the deal before the start of Canada’s federal election campaign, which is set to begin by mid-september at the latest. Canadians head to the polls on Oct. 21.
“I do not see that there will be a vote on the USMCA implementing bill by the U.S. Congress prior to the writ dropping for the Canadian election.
The earliest that the USMCA implementing bill could be introduced is Sept. 9 and there likely will be committed hearings in both chambers of Congress on the matter,” said Dan Ujczo, the Ohio-based trade specialist with Dickinson Wright.
A delay isn’t necessarily a bad thing, said Meredith Lilly, a Carleton University trade expert.
“The existing NAFTA, which remains in effect, is a better deal for Canada than the USMCA. So, the current situation is not a bad one for Canada, bearing in mind that ongoing uncertainty is generally negative for investment here.”
Trudeau reiterated his government’s position that the status quo is acceptable. “We of course benefit right now from the existing NAFTA that ensures that Canadians are well-served with good and reliable access to the North American market.”
NDP Leader Jagmeet Singh said his party shares key concerns of U.S. Democrats.
“It doesn’t make sense to rush ahead with something where we know the Democrats in Congress are working to make it better,” Singh said in an interview Monday.
Trade experts in Canada and the U.S. are divided on whether the delays may raise the odds of Trump invoking the six-month notice period to withdraw from NAFTA — a threat he repeatedly made during the tense renegotiation of the pact.
Cyndee Todgham Cherniak, a Toronto-based international trade lawyer, said the Democrats are likely to want substantive changes that could leave the deal in limbo for many months.
THE EXISTING NAFTA, WHICH REMAINS IN EFFECT, IS A BETTER DEAL FOR CANADA.