New NAFTA deal `in trouble`, bruised by elections, tariff rows
Published: 11:01 PM, 7 April 2019
The three countries struck the United States-Mexico-Canada agreement (USMCA) on Sept. 30, ending a year of difficult negotiations after U.S. President Donald Trump demanded the preceding trade pact be renegotiated or scrapped.
But the deal has not ended trade tensions in North America. If ratification is delayed much longer, it could become hostage to electoral politics.
The United States has its next presidential contest in 2020, and Canada holds a federal election in October.
The delay means businesses are still uncertain about the framework that will govern future investments in the region.
“The USMCA is in trouble,” said Andres Rozental, a former Mexican deputy foreign minister for North America.
Though he believed the deal would ultimately be approved, Rozental said opposition from U.S. Democrats and unions to labor provisions in the deal, as well as bickering over tariffs, made its passage in the next few months highly unlikely.
Canada’s Parliament must also ratify the treaty and officials say the timetable is very tight. Current legislators only have a few weeks work left before the start of the summer recess in June, and members of the new Parliament would have little chance to address ratification until 2020.
Trump, a Republican, has shown frustration with the Democratic-led U.S. House of Representatives for failing to sign off on the USMCA. He has threatened to pull out of the old pact, the North American Free Trade Agreement (NAFTA), if Congress does not hurry up.
If Trump did dump NAFTA, the three nations would revert to trade rules in place before it came into effect in 1994.
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