Canadian Legislative News

Prime Minister Justin Trudeau, U.S. President Donald Trump, and Mexican President Enrique Pena Nieto signed the new United States-Mexico-Canada Agreement (USMCA) at the G20 in Buenos Aires on November 30, 2018. This deal is a step toward a resolution of the trade war between Canada, the United States, and Mexico. Failure to reach an agreement would have severely disrupted the entire regional supply chain. USMCA is expected to help restore trade certainty and business confidence.

Legislative bodies in all three countries will now need to ratify the agreement. In Canada, the deal will have to be debated in the House of Commons and an implementation bill introduced before February 2019 if the government hopes to have USMCA ratified before the 2019 election. Political pundits and strategists do not believe this should be an issue.

In the United States, the path to ratification is not as clear. The Democrats retook control of the House of Representatives during the midterm elections and have raised concerns regarding some of the elements of the new deal, especially those around the enforcement of labor rules and the protection of American workers. Changes to the agreement may need to be passed back to Mexico and Canada for approvals.

Despite the deal being signed, punitive U.S. tariffs on steel and aluminum remain and continue to negatively impact the auto industry on both sides of the border. Increased costs of production are expected to impact vehicle prices soon. Canada and Mexico have been pushing for the removal of the steel and aluminum tariffs by the Trump administration. At the signing ceremony, Prime Minister Trudeau urged President Trump to settle the dispute.

The new trade agreement modernizes the twenty-year-old previous trilateral deal and brings resolution to most of the trade tensions between the three countries. The agreement has restored cross-border confidence which economists have suggested had been impacted by the negotiations.