23 Dec 2019
USMCA Legislation Approved in House, Could See January Vote in Senate
Legislation to implement the U.S.-Mexico-Canada Agreement updating NAFTA passed the House of Representatives on 19 December by a vote of 385 to 41. Senate Majority Leader Mitch McConnell (Republican-Kentucky) has said he will bring the bill up for Senate consideration in January after a trial concerning the impeachment of President Trump. Canada has yet to ratify the USMCA and Mexico must still approve recent revisions made by the United States. As a result, the agreement is not likely to take effect until mid-2020 at the earliest.
The U.S. International Trade Commission reported earlier this year that the USMCA includes provisions that would alter current policies or set new standards in the areas of agriculture, automobiles, intellectual property rights, e-commerce, labour and investor-state dispute settlement. Other provisions in the areas of data transfer, cross-border services trade and investment issues related to market access and non-conforming measures would reduce policy uncertainty and deter future trade and investment barriers, the USITC said, thus offering firms some assurance that current regulations and standards will not become more restrictive.
The USITC also determined that the USMCA would have only moderate impacts on U.S. economic output, employment and industry. The USITC estimated that after six years the agreement would increase U.S. real GDP by 0.35 percent, U.S. employment by 0.12 percent and U.S. wages by 0.27 percent. The USITC also found that there would be little to no change to the U.S. balance of trade with either Canada or Mexico. However, U.S. Trade Representative Robert Lighthizer said these numbers show that the USMCA “will have a more positive impact on our economy, jobs, and wages than any other U.S. trade agreement ever negotiated.”
Lighthizer also said that the USMCA “represents the gold standard in U.S. trade policy,” as evidenced by the “first-ever trade coalition of workers, farmers, Republicans, Democrats, business and agriculture groups, organized labour and much more” that have registered their support of the agreement. As a result, Lighthizer said the USMCA “will be the template for U.S. trade agreements going forward.” House Ways and Means Committee Chairman Richard Neal (Democrat-Massachusetts) agreed, saying the pact sets “enhanced standards for all future U.S. trade agreements to build upon,” but Committee Ranking Member Kevin Brady (Republican-Texas) said the USMCA is “not a perfect agreement” and that he will “continue to improve the areas that we think the areas can be in future agreements.”