Agreement expected to go into effect in June
The Canadian Parliament has ratified the U.S.-Mexico-Canada trade agreement (USMCA) before taking a three-week recess amid the new coronavirus (COVID-19) pandemic.
The “new NAFTA” deal updates the 26-year-old North American Free Trade Agreement and includes tougher rules on labor. The United States and Mexico have already ratified the pact.
While the House of Commons lower chamber had weeks of deliberation left on the agreement, opposition legislators dropped their objections in order to approve the deal quickly before the recess.
The quick approval “was entirely within the power of Canadian legislators to do, something we were able to do to help the Canadian economy at this challenging time, and I would like to thank legislators from all parties,” said Deputy Prime Minister Chrystia Freelan.
Canada’s governor-general must approve the measure as a formality before it is officially ratified.
“Now that the USMCA has been approved by all three countries, an historic new chapter for North American trade has begun,” U.S. Trade Representative Robert Lighthizer said in a statement.
The USMCA is expected to go into effect on June 1.
A study released in November showed that, while the USMCA will expand U.S. agricultural exports by $450 million, but those gains will be negated by retaliatory tariffs by Canada and Mexico against the U.S.
The analysis says retaliatory tariffs will cause U.S. agricultural exports to decline by $1.8 billion and that, with continued tariffs from China and other trading partners, “the United States would see a decline in agricultural exports of $7.9 billion, thus overwhelming the small positive gains from USMCA.”
