USMCA
March 14, 2019

Is USMCA Ratification Around The Corner?

 |  By: Anna-Lisa Laca

U.S. Trade Representative Robert Lighthizer and his team have been working tirelessly on the U.S. Mexico Canada Agreement for well over a year. The trade deal which will replace the North American Free Trade Agreement has been signed by all three participating countries, but still has yet to be ratified by Congress, something lawmakers hope happens this summer.

“I surely would like to see us pass USMCA this year,” Rep. Steve Scalise (R-LA) told AgDay host Clinton Griffiths. “We have worked with President Trump and his team as we started to put together our team in the House to get the votes to pass it.”

Similarly, Senator Roy Blunt (R-MO) says he thinks the bill is headed in the right direction and that Congress needs to take it up within the next 100 days.

“I think the timeline for the vote is that that bill is going to come to the Congress pretty soon,” he told Griffiths. “I think we feel like we need to get it done sometime in the next hundred days and I hope that sometime during that period of time, and certainly no later than that treaties been agreed to by the Congress, that those tariffs go away.”

But passing the deal could be a challenge. While he supports the deal, Rep. Collin Peterson (D-WI) isn’t convinced the votes are in order for the House to pass the USMCA. In fact, he said the deal would not be brought to a vote until enough votes to pass the deal have been secured. There’s another unique challenge to getting USMCA passed, according to Farm Bureau economist Vanessa Nigh.

“USMC is going to have to be passed by both the Senate in the House. The Senate is pretty easy as far as trade votes go. While trade votes are always a tough vote, the House it think is a little bit more complicated,” she explained to Griffiths. “Since the House flipped back in the fall, we have a lot of folks who have never voted on a trade agreement.”

Because trade deals always have an overarching impact on so many elements of the U.S. economy, they are often tough. However, Nigh said there's a lot of trade education going on right now to help lawmakers understand the agreement before they vote.

“It seems at this point when you talk to folks who aren't taking a position on USMCA it seems to be not necessarily opposition, but lack of experience with trade agreements and really trying to wrap their arms around what's actually included,” she said.

Ambassador Lighthizer has been personally involved in many individual conversations, according to Scalise.

“The President's entire team has been deployed to meet with members of Congress to work through the differences and understanding of why this is a better agreement than the current NAFTA,” he said.

Taking Down Tariff Barriers

Early in the NAFTA renegotiation process, President Trump placed steel and aluminum tariffs on Canada. According to Blunt, Republican lawmakers are working hard to help the president understand the damage being caused by the tariffs so he will remove them more quickly.

“I think clearly understanding how many people there are, that are dependent on having that a competitive product, as opposed to people who make those two products in our country and we continue to talk to the President about that,” he said. “If a tariff is a reason to get a country’s attention that you think has taken advantage of us, once we come to agreement, you would think that would also be the time that you show every other country in the world that one of the benefits of agreeing to good trade deals with United States of America is that policies like a tariff on steel and aluminum from your country would be able to be allowed to go away.”

Removing tariffs and ratifying USMCA is incredibly important for agriculture, according to Ken Isley, administrator of the U.S. Department of Agriculture (USDA) Foreign Agricultural Service.

“[The agreement] is incredibly important for agriculture, $80 billion worth of ag products flow between the three countries. They are two of our top three markets every year. So we're anxious to get that finalized and implemented to restore our position,” he told Griffiths. “We also understand the impact of the 232 tariffs and the retaliation from those countries on our exports. So, we'll see how that evolves in terms of whether those tariffs could be lifted based on negotiation.”

Summer Deadline

While it’s still unclear exactly when Congress will go to a vote, Nigh said it’s really important it happens by the end of the summer.

“We really need to clear this off of the, the deck before the you know, before the fall before we really get into the next presidential election cycle,” she said. “It would be good to have USMCA past us.”

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