December 2, 2019

U.S. Policymakers Make Some Progress On USMCA

Democrats from the U.S. House of Representatives and U.S. Trade Representative Robert Lighthizer upheld their promise to meet during the American Thanksgiving holiday to discuss remaining disagreements about the United States-Mexico-Canada Agreement, or USMCA. Early in the week, House Speaker Nancy Pelosi (D-Calif.) expressed optimism about the talks, saying the two sides are “within range” of a deal. To get to the finish line, the Speaker said Democrats “need to see our progress in writing from the [Office of the U.S.] Trade Representative for final review.”

Canadian Deputy Prime Minister Chrystia Freeland also was in Washington, D.C. last week to meet with Ambassador Lighthizer and Mexico Undersecretary for North America Jesús Seade to discuss the pact. Freeland said the meeting was a positive one, and also told reporters, “Canada believes in this agreement, we have a strong interest in having this deal ratified in all three countries, and we’re very supportive of the efforts being made… and we were here to work to support all of those efforts.” The Canadian Parliament will work to ratify the deal when it reconvenes in early December, but, as CTV News explained, “With the House only scheduled to sit for just over a week before breaking until late January, it’s yet to be seen how quickly the legislation will be able to move.”

Politico reported that officials from Canada are likely to agree to any changes their U.S. counterparts make to the USMCA, “but Mexico remains more of an open question” since some U.S. lawmakers and labor leaders “are pushing for changes that would be a threat to the country’s sovereignty.” Still, as Politico also reported last week, the Mexican government is doing what it can to alleviate U.S. lawmakers’ concerns about the labor provisions in the USMCA, including approving a 2020 budget that includes an even larger amount of money dedicated to the implementation of its labor law overhaul than Mexican President Andrés Manuel López Obrador originally promised.

As a reminder, you can find MSCI’s priorities for an updated trade agreement between Canada, Mexico, and the United States in our June 2017 comments to the Office of the U.S. Trade Representative.