The US, Mexico and Canada on Tuesday signed a deal to finalize their new trade agreement, paving the way to ratification after more than two years of arduous negotiations.
However, the impeachment trial of US President Donald Trump in the US Senate would likely delay congressional ratification of the agreement until next year, US Senate Majority Leader Mitch McConnell said.
In reality, it is the second time the three countries have triumphantly announced the conclusion of the US-Mexico-Canada Agreement (USMCA), the deal meant to replace the 25-year-old North American Free Trade Agreement (NAFTA), which Trump complains has been “a disaster” for the US.
First signed in November last year, USMCA got bogged down in political complications, particularly in the US, where opposition Democrats questioned whether it would really force Mexico to deliver on labor reforms meant to level the playing field between Mexican and US workers.
However, another year of talks produced a series of additions — notably including tougher enforcement of labor provisions — that won the blessing of House Speaker Nancy Pelosi, the key Democrat needed to move the agreement forward, as well as the largest US labor federation, the AFL-CIO.
Mexican President Andres Manuel Lopez Obrador, who presided over the signing ceremony, said the deal “will benefit both Mexican and American workers.”
He hailed it as a “driver of growth” for all three countries’ economies.
“Some people thought it was impossible to reach this deal. Some people thought we wouldn’t be able to agree on anything [with Trump], but look what we’ve done,” he said.
The final deal, which must be ratified by the three nations’ legislatures, is to replace the 1994 NAFTA, the historic pact that erased nearly all tariffs across the region, deeply integrated its economies and helped turn Mexico into an export powerhouse.
Under NAFTA, the region — which represents close to 30 percent of the global economy and is home to nearly 500 million people — did US$1.2 trillion in trade last year.
Analysts say USMCA is similar to NAFTA in many respects, but there is improved access for US agricultural goods, including dairy products, which Canada in particular had tried to limit.
It includes rules designed to improve US auto workers’ competitiveness, requiring 40 percent of each duty-free vehicle to be made by people earning at least US$16 an hour.
Besides labor enforcement rules, the additions signed on Tuesday include tougher measures to monitor environmental provisions and remove the requirement for the countries to provide at least 10 years of exclusivity for biologic drugs, which blocks cheaper generic versions.
US Trade Representative Robert Lighthizer signed the annex to the deal in Mexico City along with Canadian Deputy Prime Minister Chrystia Freeland and Mexico’s top negotiator on the accord, Jesus Seade.
Senior Trump adviser Jared Kushner, the president’s son-in-law, also attended.
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