There was a time when the USMCA negotiation dominated agricultural trade headlines. But that was before the U.S./China trade war standoff. Still, the importance and momentum on ratifying the “new NAFTA” needs to continue.
For Canadian agricultural exporters, NAFTA was deemed a success during its tenure, and the USMCA holds the majority of that export-dependent trade intact.
In a journey that started almost two years ago, the new NAFTA, now USMCA, is approaching a resolution as Canada, Mexico, and the United States see a path to ratification. Earlier this week the section 232 tariffs on steel and aluminum were lifted by U.S. President Donald Trump and in reply Canada lifted its own retaliatory tariffs.
The Canadian government had been emphasizing that a ratification would not move ahead without the U.S. metal tariffs being lifted.
Now that the metal tariffs are behind us, the countdown to all three countries ratifying is on. The clock is definitely ticking, as Canada has a federal election in the fall and the U.S. 2020 election is fast approaching. With only weeks left in the Canadian spring legislative calendar some people believe Canada should oblige U.S. Democrats before ratifying.
Lori Wallach, the director of Public Citizen’s Global Trade Watch who consults frequently with congressional Democrats and the Trump administration, said hasty ratification outside the U.S. could poison talks in Washington. Wallach explained House Democrats might recoil if they feel they’re being pressured into accepting the deal in its current form. “It is extremely ill-advised to rush to approve the text of an agreement that the Democratic House majority has already made clear is not something they’re ready to approve as is.” “It would send a really counterproductive signal to the delicate balance between the congressional House Democrats and the White House.”
In my opinion, Canada should be looking out for itself and not the interests of the Democrats in the House of Representatives no matter if the Trudeau government has aligned interests or not. Throughout this entire negotiation there is a history of countries looking out for their own self interest and not the collective. Some examples include: Mexico negotiating a bilateral with the U.S. which put Canada on the outside looking in, and, the Trump metal tariffs due to national security concerns being another.
The true congressional drama on the USMCA may be just in front of us as President Trump distributed a letter late Tuesday, May 21, saying that he would do nothing on infrastructure without a ratification of USMCA. In my opinion there is a slight chance that using infrastructure spending as leverage could appease all political sides on USMCA.
Suggesting that a quick ratification in Canada would entrench Democrats more seems silly to me. Canada cannot make Democrats hate President Trump anymore than they already do. This reasoning seems like D.C. bubble silly speak to me.
An early Canada ratification will put pressure on USMCA supporters to raise pressure on congressional colleagues to stop holding up the deal. This is exactly the scenario that transpired with CPTPP ratification. As countries started to ratify CPTPP, it put pressure on other members to ratify quickly to be a part of the original six countries in that deal.
Conservatives and Liberals will not agree on many things this fall during the election, but the benefits of a secured USMCA is something most Canadians can wrap their heads around.