Delay the USMCA? Business Leaders Call for Postponing Implementation of the ‘New NAFTA’
he United States–Mexico–Canada Agreement (USMCA) was signed by U.S. President Donald Trump, former Mexican President Enrique Peña Nieto, and Canadian Prime Minister Justin Trudeau on November 30, 2018. The USMCA was designed to update and replace the North American Free Trade Agreement (NAFTA). Canada was the last of the three signatories to ratify the deal.
On March 13, 2020, the Parliament of Canada quickly ratified the USMCA before taking a three-week break to address the COVID-19 crisis. With Canada’s ratification, it appeared that the new trade deal would be implemented, marking a significant shift in cross-border trade. The United States proposed an implementation date of June 1, 2020, and U.S. Trade Representative Robert Lighthizer sent Congress notice of the proposed date in early March 2020.
Amid the unfolding COVID-19 public health crisis, business groups have requested a delay in the implementation of the USMCA, raising concerns about having to adapt to the new rules during a global pandemic. In particular, there has been a strong push from the automotive industry and its representative groups to delay implementation because of the difficulties faced by companies adjusting to new rules and regulations in the current environment.
However, there is still pressure in the United States to implement the USMCA before the November 2020 elections. The Trump administration appears motivated to bring the deal into force on June 1, 2020.
Ultimately, there are challenges to implementing the USMCA in the current global environment, with supply chains and international trade being significantly impacted by the COVID-19 pandemic. We will continue to monitor the positions taken by government leaders in the USMCA’s member countries and their responses to calls for delay.