The Schaumburg Business Association participated in the U.S.-Mexico-Chamber of Commerce Chicago roundtable update and discussion on the pending US-Mexico-Canada free trade agreement (USMCA).
Joined by representatives from the US Chamber of Commerce, the Consulate General of Mexico Chicago, Canadian officials, and business leaders from around the Midwest the discussion centered around the possible differences between the North American Free Trade Agreement (NAFTA) and the USMCA and the steps towards ratifying the provisional agreement.
The USMCA seeks to modernize NAFTA which was originally agreed upon 25 years ago and had not been updated to account for significant economic changes that have emerged since the mid-90s. These discrepancies include a digital economy, a shared automotive sector, and strengthened labor laws for workers across North America.
Long discussed the USMCA cleared an important hurdle when US House of Representatives Speaker Nancy Pelosi announced that Democrats in the House of Representative and President Donald Trump had reached an internal agreement on USMCA allowing the trade treaty to be brought to a vote before the end of 2019.
This domestic agreement now positions the USMCA for final ratification with each country’s federal legislature for final ratification and implementation. While much of the attention in the United States had focused on the negotiations between Speaker Pelosi and President Trump the US-Mexico Chamber breakfast provided a unique opportunity to understand the Mexican and Canadian path forward towards ratification.
The primary takeaway is that both Mexico and Canada would like to see the modern benefits of the USMCA but both have “clear lines” of positions that are unacceptable and untenable for each country. The most intriguing dynamic is that the Mexican Senate has already ratified the USMCA and is waiting for the United States and Canada to ratify before executing.
The Canadian parliament is waiting for the United States to take action on USMCA before proceeding with a vote in order to maintain leverage for any unforeseen final negotiations that result because of partisanship.
With a provisional agreement in place in the United States and a vote scheduled for before the House of Representatives adjourns for 2019 the outlook for the USMCA – after 18 months – is promising with passage expected in February of 2020. The Schaumburg Business Association will continue to monitor and update the economic implications of the USMCA (and Schaumburg’s specific relationship with Mexico and Canada) as this trade treaty moves to formal, and adopted, ratification.
