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March 26, 2019

USMCA Approval In Limbo

 |  By: Anna-Lisa Laca

While U.S. officials continue to say the U.S. Mexico Canada Agreement is headed for Capitol Hill soon, Canadian Foreign Affairs Minister Chrystia Freeland says her country won’t approve the deal until steel and aluminum tariffs are removed.

"I ... made the point to Ambassador Lighthizer that the existence of these tariffs for many Canadians raises some serious questions about ... ratification," Freeland told reporters after a meeting with Robert Lighthizer on Monday. "In order to move ahead with that deal, I think Canadians feel the right thing is there should be no 232 tariffs or retaliatory measures between our two countries. That was what I expressed clearly to Ambassador Lighthizer."

In March of last year, President Donald Trump imposed tariffs on imports of steel and aluminum under Section 232 of the Trade Expansion Act of 1962 on the grounds of national security. Those tariffs remain in place despite an agreement in principal on a new North American trade deal.

Canada’s House of Commons adjourns in three months and doesn't meet again until after the October election, according to Pro Farmer Washington analyst Jim Wiesemeyer.

“With the Canadian election months away, Freeland said Canadian citizens would have a hard time accepting Canada rushing to adopt USMCA while they still face U.S. tariffs of 25% on steel and 10% on aluminum,” he said.

Sources say all sides of the issue are positioning ahead of continued discussions on a U.S. push for a quota system of metal imports into the U.S., Wiesemeyer said.

However, Mexico Deputy Economy Minister Luz Maria de la Mora told reporters that “quotas make no sense.”

 “What industry in North America needs is the elimination of this tariff,” she said.

U.S. trade negotiators reportedly are insisting a quota system be established, according to Wiesemeyer.

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Meanwhile, a group of Republican lawmakers plan to meet with President Trump on Tuesday to discuss the effort to get the trade agreement approved.

“Getting the new NAFTA through the House will require the votes of a majority of Republicans and an undetermined number of Democrats,” Wiesemeyer said.

Democrats may not want to give the president a victory on trade given their opposition to most of his policies, Rep. Kevin Brady (R-Texas), ranking member of the House Ways & Means Committee, said.

"There's no good excuse for them not to back it," Brady said, noting that Lighthizer included labor provisions in the updated NAFTA that Democrats have long sought.

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