WASHINGTON, DC—Just over a week ago, when Canada’s Deputy Prime Minister Chrystia Freeland jetted to Washington to meet with U.S. and Mexican officials on the eve of the American Thanksgiving weekend, it appeared a resolution to long-running trade talks was imminent.
Canadian officials were saying it was close. American politicians measuring rhetorical distance in football metaphors had the ball inside the three yard line. It seemed, more than a year after the deal to replace NAFTA, it might be ratified by the U.S. Congress before its Christmas break.
Now, the situation appears cloudier. While there remains a chance a deal could be imminent — and possibly might even be reached in principle by Friday night — ratification before the end of the year seems increasingly unlikely.
Official sources of information have clammed up, some citing a situation that is fluid, apparently awaiting Mexico’s sign off on U.S. Democrats requests for labour inspectors in its factories and more stringent requirements on using North American steel in products.
During a break in negotiations early Friday afternoon, Mexico’s Deputy Foreign Minister Jesus Seade said they were dealing with “last issues” and that “everything can be resolved,” Reuters reported, a position he’s been repeating more or less for over a week.
But others seemed less optimistic.
Trade lawyer Daniel Ujczo of Dickinson Wright who tracks the file closely, said the delays this week are simply running out the congressional calendar for this year.
“I would call it a hair-through-the-eye-of-a-needle’s chance we can get a vote by Dec. 20, when Congress goes away” for its winter break, he said. “We haven’t hit a deadline yet on USMCA, (United States-Mexico-Canada Agreement) had been signed,and I don’t see that changing right now.”
What may be noteworthy about failing to pass it before the end of the year is how the deal’s legislative path interacts with impeachment proceedings. If the House of Representatives votes to impeach President Donald Trump, as it is expected to do this month, the Senate is unable to undertake any other business until it holds a trial, Ujczo explains. This could push any consideration of the deal well into the U.S. presidential primary calendar, something Democrats had widely been expected to try to avoid. But Ujczo now says he thinks there a chance House Speaker Nancy Pelosi still might find it politically advantageous to deal with it even into late winter or early spring.
Scotty Greenwood, the CEO of the Canadian American Business Council which has been pushing for the deal, says she still thinks it is in everyone’s political interest in the U.S. to pass it, if not this year, then early in 2020. “The end of the year isn’t magic,” she says, noting the deadlines are all self-imposed goals, not statutory requirements.
Greenwood says that Trump wants the deal passed as an achievement he can cite, but many congressional Democrats, especially those in border states that rely on trade, also want to be able to go into the election saying they passed the deal.
“There’s a lot of interest even from the Democratic caucus in having the ability to vote. The beauty for Pelosi is there’s enough oxygen right now that some members of the caucus who need politically to vote against this, they can, while others who want to vote for it can,” Greenwood says. “So she can have her cake and eat it too from the caucus point of view and the deal still passes and gets signed into law.”
“This shows, you know, you can govern. You don’t get accused of giving the president a political victory, and being too easy on the president, because you’re impeaching him for God’s sake.”
The deal to replace NAFTA was agreed to in November 2018, and needs to be ratified by all three countries before it becomes law. Mexico has already done so, while Canada is expected to do so without delay shortly after the U.S. does. But U.S. congressional Democrats have been hoping to negotiate amendments wanted by the labour movement, and to address some other environmental, tech, and pharmaceutical patent concerns.
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After last week’s meeting, it was widely reported that all countries seem ready to sign off on loosening drug patent protection time frames, something Canada and Mexico wanted in initial negotiations.
Ujczo says that even if the Mexican government were to sign off and announce they’d reached an agreement with Canada and Trump’s negotiator this weekend, congressional Democrats would still want to take the amendments back to their stakeholders — business and labour leaders — to ensure they can live with the result. And doing that, and then drawing up legislation and passing it in under two weeks, seems increasingly unlikely.
“And that process is going to take time, and it’s time we don’t have candidly. So I think with each passing hour, it looks more like this is going to get pushed to the new year, in order for this to have the consideration by members of congress and key stakeholders.”