U.S House Passes U.S.-Mexico-Canada Trade Agreement

The house passage of the USMCA trade agreement is lauded as a success by Canada, Mexico and the U.S.

On 20 December 2019, the U.S. House of Representatives by a vote of 385 to 41 passed legislation (H.R. 5430) to implement the U.S.-Mexico-Canada Agreement (USMCA). Senator Charles Grassley (R-IA), Chairman of the U.S. Senate Committee on Finance, announced the Committee will mark-up H.R. 5430 on 7 January 2020 in anticipation that by then the House will have referred the legislation to the Senate. The full Senate is expected to consider the legislation later in January or February.

The Mexican legislature has already passed legislation to implement the agreement, but the Mexican Senate held consideration until concerns by the Mexican Government about five labor inspectors or attaches to be based at the U.S. Embassy in Mexico City were addressed. U.S. Trade Representative Robert Lighthizer wrote to Mexican Deputy Foreign Minister Jesus Seade to assure him the attaches would help coordinate the implementation of the labor reform provisions of the agreement and would not inspect Mexican facilities. The Canadian legislature is expected to consider USMCA when it returns on January 27.

The Mexican legislature has already passed legislation to implement the agreement, but the Mexican Senate held consideration until concerns by the Mexican Government about five labor inspectors or attaches to be based at the U.S. Embassy in Mexico City were addressed. U.S. Trade Representative Robert Lighthizer wrote to Mexican Deputy Foreign Minister Jesus Seade to assure him the attaches would help coordinate the implementation of the labor reform provisions of the agreement and would not inspect Mexican facilities. The Canadian legislature is expected to consider USMCA when it returns on January 27.

The new deal will also open Canadian dairy markets to increased U.S. exports. Canada has also agreed to end a system that it used to keep the prices of some milk products low. U.S. drug companies will also now be able to sell pharmaceuticals for 10 years in Canada before facing generic competition. The Chapter 19 provision, which helps resolve trade disputes between the three countries, was kept in place--a win for the Canadians. The new agreement contains increased intellectual property protections that have been updated to include new technologies that were not around when NAFTA was originally negotiated. The deal also calls for higher safety and environmental standards and states that Mexican workers must have more ability to organize and form unions.

President Trump made the renegotiation of NAFTA a key platform of his presidential campaign. On 2 February 2017, shortly after taking office, Trump announced his intention to enter negotiations with Canada and Mexico to revise NAFTA. On 30 November 2018, the leaders of the three countries signed the agreement. The final revised agreement was then signed on 10 December 2019 by their respective trade representatives. Both President Trump and Congressional Democrats, who pushed for additional labor reform considerations from the original deal, are declaring the agreement a victory while the Canadian and Mexican governments are also touting the provisions more favorable to their countries.

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How This Impacts Mobility

Trade agreements have a significant impact on the business relationships between countries and thus the relocation of individuals between not only the countries involved in the agreement but others as well. Depending on the details of a new agreement, companies could make shifts in the locations of their operations and personnel in the U.S., Canada and Mexico and around the globe.

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