New North American Trade Pact Nears Finish In US Senate

The U.S. Senate Finance Committee on Tuesday voted 25-3 to move the U.S.-Mexico-Canada Agreement (USMCA) Implementation Act (H.R. 5430) forward. The next step is for the full Senate to approve the revised agreement, which was the House of Representatives passe

Benzinga · 01/08/2020 13:53

The U.S. Senate Finance Committee on Tuesday voted 25-3 to move the U.S.-Mexico-Canada Agreement (USMCA) Implementation Act (H.R. 5430) forward.

The next step is for the full Senate to approve the revised agreement, which was the House of Representatives passed overwhelmingly on Dec. 19.

"This modernized trilateral trade agreement will open new markets for American exporters, create hundreds of thousands of new jobs, grow the national economy and protect U.S. workers," said Senate Finance Committee Chairman Chuck Grassley, R-Iowa, in a statement. "I expect the full Senate will act soon and that final approval of USMCA is just around the corner."

Ranking Committee Member Ron Wyden, D-Ore., said "this new NAFTA delivers long-overdue upgrades to labor standards, the environment and digital trade, while providing certainty to farmers and manufacturers who have been hammered in recent years."

USMCA includes a half-dozen new provisions over its 25-year-old predecessor, the North American Free Trade Agreement (NAFTA). For example, all North American-manufactured autos will require 75% of parts be sourced from one of the three countries, and U.S., Mexican and Canadian autoworkers must be paid a minimum of $16 per hour.

U.S. dairy farmers, particularly those in the Upper Midwest, are expected to enjoy more access to the Canadian market. Environmental protections have also been increased, and improvements are included for the North American trade of biologic drugs.

"The road we traveled to arrive at this meeting today tested my patience at times. And, there are some aspects of this bill I don't particularly like," Grassley said. "But as I reflect on how we got here, I'm proud of the hard work of many individuals that made it possible to achieve a strong agreement, and a bill that could garner broad support."

On May 18, 2017, U.S. Trade Representative Robert Lighthizer informed Congress that President Donald Trump intended to start negotiations with Canada and Mexico with respect to NAFTA. Negotiations among the three nations to replace NAFTA concluded in September 2018.

Mexico's Senate has already ratified the USMCA, while Canada's Parliament is expected to take up the trade pact soon.

Image by PublicDomainPictures from Pixabay