One down, two to go. On Wednesday, the Mexican Senate passed the United States-Mexico-Canada Agreement, becoming the first nation, of three, to ratify the new trade deal. The agreement was met with little resistance, relative speed, and enthusiastic celebration from the Mexican government upon ratification. That was the easy part. The USMCA still faces an uphill battle in Washington, and a race against time in Ottawa.
“USMCA passes!” That was the triumphant tweet sent out by Jesus Seade, Mexico’s Undersecretary for Foreign Affairs. “Mexico goes first with clear signal that our economy is open.” Another prolific tweeter sent his congratulations to Mexico, and President Andres Manuel Lopez Obrador. “Mexico voted to ratify the USMCA today by a huge margin,” President Trump tweeted. “Time for Congress to do the same here!” Under Mexican law, treaties, once ratified by the Senate, become the supreme law of the land. Thus, any contradictory legal or constitutional provisions must be made first. One such change involved an important concession to Democrats across the border.
Speaker Nancy Pelosi (D-CA), and other congressional Democrats, had insisted on changes to Mexican labor laws— namely, giving them the right to unionize. The Mexican Senate did just this at the end of April. However, Pelosi and union leaders are concerned Mexico may not be able to deliver on this and other promised changes. While Pelosi insisted Democrats “have been on a path to yes,” other caucus members have a long list of demands for the Trump administration to meet before they can get there.
If you’re wondering why the House is involved at all, the USMCA is considered a revenue bill— not a treaty— meaning Pelosi decides when and how the agreement will be passed. Of course, any changes either party decides to make to the USMCA would require ratification from Mexico and Canada— essentially, a return to square one.
Canada requires treaties to be tabled in the House of Commons 21 sitting days prior to further action, which was done on May 29. However, the House breaks for the summer on Friday, and Prime Minister Justin Trudeau’s government is in no hurry to act. Trudeau has spoken frequently about his desire to get a deal done, but his first order of business is an increasingly-shaky re-election. While Parliament could always be called back sooner, Trudeau is expected to drop the writ and dissolve Parliament in September. That would leave the USMCA to another Parliament— and, possibly, another government.
Leader of the Opposition, Andrew Scheer, announced his Conservative Party would “reluctantly support” the USMCA when it was tabled in May. However, he blasted Trudeau for, in his words, caving to Trump’s demands. “The Prime Minister had a once-in-a-generation opportunity to negotiate a better deal— and he failed,” Scheer said. “He gave Donald Trump everything he wanted and more.” This will, no doubt, become an issue once the official start of campaign season hits in the fall.
Meanwhile, AMLO, Mexico’s left-wing populist President, wants USMCA to remove uncertainty for foreign and domestic investors. Approval by all three countries would allow him to move on to other domestic priorities. For Trump, USMCA ratification would mean the fulfilling of a campaign promise— to repeal and replace NAFTA— and a rare, bipartisan win through Congress. Even Democrats would seem to have something to gain, after campaigning against NAFTA since it was ratified 25 years ago. With Republicans’ sudden embrace of economic nationalism and mercantilist protectionism, support for the USMCA might give Democrats some unlikely converts as the party of free trade.
The USMCA has the potential of becoming a win for everybody. If only everybody could see it.