NAFTA 2.0 Update

Source: Canada US
Link: NAFTA 2.0 Update

There have been a few developments in the NAFTA 2.0/USMCA/CUSMA process in the past few weeks.

1. The Government of Mexico published in the July 29, 2019 issued of the Official Gazette a decree that was signed by Mexican President Andrés Manuel López Obrador to complete the final step in the ratification process in Mexico.  The decree approves the Protocol replacing the North America Free Trade Agreement (“NAFTA 1.0”) with the new free trade agreement between Mexico, the United States and Canada (“NAFTA 2.0”).

2. In early August 2019, the Democrats in the U.S. Congress sent the United States Trade Representative detailed proposals for changes to NAFTA 2.0, including changes to the labor, environment, pharmaceutical and enforcement provisions.  The text of the proposals has not been published. It is expected that the Democrat’s proposals include a demand that country of origin labeling for meat products (also known as “COOL”) be added to NAFTA 2.0.

3. Nancy Pelosi wrote the following in a letter on August 7, 2019: ”

On the legislative front, in regards to the U.S-Mexico-Canada Agreement, I am proud of the ongoing work of the Members on our USMCA Working Group led by Chairman Richie Neal. Top Democrats have made the priorities and concerns that need to be addressed in the proposed trade agreement clear to the Administration. That includes strong labor standards to defend the jobs and wages of American workers, lower prescription drug costs, meaningful environmental protections and the overarching need for real, tough enforcement mechanisms. The Working Group continues to be in direct communication with the Administration during the district work period.

4. Canada’s Ambassador to Washington, David MacNaughton announced is resignation on August 8th.  Ambassador MacNaughton has been a key figure one Canada’s NAFTA 2.0 negotiating team. The Minister of Foreign Affairs also released a statement.

5. On July 29, 2019, the C.D. Howe Institute issued a memo in which it discussed that NAFTA 2.0 is a net negative for Canada.  On July 25, 2019, the C.D. Howe Institute issued a report on the same subject. The report concludes that the NAFTA 2.0 negatives will outweigh the positives for all three parties and that Mexico will be effected the most and the U.S. the least.

For more information about NAFTA 2.0, please contact Cyndee Todgham Cherniak at 4160307-4168 or at cyndee@lexsage.com.