USMCA Moves Forward As Canada, U.S., Mexico Sign Off On Changes

OTTAWA — Canada joined the United States and Mexico in heralding a new era of North American prosperity on Tuesday as they formally agreed to changes to the new continental free trade deal first reached last year.

The amended deal comes after years intense, at times bitter, negotiations to update the 25-year-old North American Free Trade Agreement.

“This has been a long, arduous and at times fraught negotiation,” said Deputy Prime Minister Chrystia Freeland, who was in Mexico City for the elaborate signing ceremony.

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U.S. trade czar Robert Lighthizer and Mexican undersecretary for North America Jesus Seade signed the document beside her.

“All of us together have finally accomplished what we set out to do at the very outset: a win-win-win agreement which will provide stability for workers in all three of our countries for many years to come,” Freeland said.

The three countries originally signed the new NAFTA, known formally as the U-S-Mexico-Canada Agreement, in November 2018 but it still had to be ratified by each national government. Mexico ratified the original deal in June, while the Canadian government said it would ratify the agreement at the same time as the United States.

U.S. ratification stalled as Democrats in Congress and their organized labour allies bickered with Mexico over labour rights, as well as the deal’s treatment of steel and aluminum.

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Democrats were also upset with provisions around intellectual-property rules on pharmaceuticals and settling disputes, all of which led to fresh negotiations to amend the deal by tightening up some areas of the proposed agreement and loosening others.

The revised deal was immediately met with both applause and anger from various Canadian business associations, with some blasting the amendments as harmful to their industries and others welcoming the changes and the agreement’s imminent ratification by all three countries.

“We look forward to reviewing the text in detail, but after years of uncertainty it appears a modernized and enhanced North American trade agreement is finally ready to go before Parliament,” said Goldy Hyder, president and CEO of the Business Council of Canada.

“Trade with the United States and Mexico supports thousands of businesses and millions of high-value jobs in communities across Canada. We call on MPs from all parties to make the ratification and implementation of this agreement a top priority.”

The aluminum and brand-name pharmaceutical sectors were particularly upset with the revisions, which saw Mexico agree to a tighter definition on what constitutes North American steel but not aluminum and a loosening of intellectual-property rules on medication.

“This is disappointing news for Canada’s innovative pharmaceutical industry, which is already facing significant challenges launching new medicines and attracting new investment in Canada,” said Innovative Medicines Canada president Pamela Fralick said in a statement.

“Today’s announcement sends the wrong signal to the thousands of researchers and scientists across the country who have dedicated their lives to finding new cures and innovative treatments to help Canadians live longer, healthier lives.”

Freeland, Lighthizer and Seade went out of their way to defend the deal in separate addresses prior to signing the agreement, with the Canadian deputy minister insisting the federal Liberal government “worked hard to defend the interests and values of Canadians.”

Seade made a particularly lengthy defence of the deal, which will see the U.S. monitor Mexican labour reforms that include increasing wages for the country’s automotive workers and more protections from violence.

U.S. House Speaker Nancy Pelosi said in Washington on Tuesday morning that congressional Democrats were supportive of the changes, which were also approved by their AFL-CIO trade federation allies, paving the way for implementing legislation to finally be tabled in Congress.

“This is a day we’ve all been working to and working for,” Pelosi said.

It wasn’t immediately clear when the deal will be tabled, though Pelosi did say Democrats were hoping to get moving before the end of the congressional session on Dec. 20.

There had been concerns the agreement would not be approved before Congress disperses until 2020 and its focus shifts to next fall’s presidential election.

U.S. President Donald Trump, labour unions and many Democratic lawmakers branded NAFTA 1.0 a job-killer for America because it encouraged factories to move south of the border, capitalize on low-wage Mexican workers and ship products back to the U.S. duty-free.

This report by The Canadian Press was first published on Dec. 10, 2019.