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House Passes Long Overdue USMCA Trade Pack

Fri, December 20, 2019 11:14 AM | Anonymous member (Administrator)

Yesterday, the House passed President Trump’s signature trade achievement, USMCA, after a year’s delay in taking-up the critical rework of the often criticized NAFTA deal. The US-Mexico-Canada trade pack (i.e., USMCA) was a top priority for the Administration throughout 2019, after the U.S. Trade Representative had pulled-off what was considered impossible, that is – a complete and utter rewrite of the 20-plus year old NAFTA agreement.  The measure will be considered under Trade Promotion Authority (TPA). In accordance with those rules, Congress cedes authority for negotiating trade agreements to the Administration, which must follow consultation requirements and congressionally determined negotiating objectives. Once draft implementing legislation is submitted, Congress has up to 90 legislative days to hold votes in both chambers. A simple majority is required for passage and no amendments are allowed. Finally passage is expected with the President eager to sign the treaty into law sometime early next year.

The U.S. House of Representative approved the U.S.-Mexico-Canada Agreement (U.S. law will be adjusted to comply with it under H.R. 5430). The measure also appropriates funding to implement and enforce the deal.

NAFTA, which took effect in 1994, integrated the three countries' economies and covers most of the $1.25 Trillion in trade among them. The USMCA includes many of the same provisions as NAFTA.  However, it adds new chapters on labor and the environment, which were previously addressed in side agreements; as well as updates to reflect the modern economy, including new provisions on e-commerce and digital trade. It also includes North American content and labor value requirements for automobiles, stronger intellectual property protections, and expanded agricultural market access between Canada and the U.S. [After the three countries signed the deal in 2018, House Democrats announced changes they wanted related to labor, the environment, pharmaceuticals, and enforcement. Following further negotiations, the three countries signed the revised agreement. The revisions remove a provision that would have required the countries to provide at least 10 years of exclusivity for biologic drugs, as well as a provision from NAFTA that allowed countries to block the formation of dispute resolution panels. It also adds additional labor and environmental oversight provisions].

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