USMCA: Ratification on 2020
The USMCA is trapped between the political and electoral interests of the U.S. and Canada’s Congress. Its ratification and entry into force is far from materializing in the remainder of 2019, the most recent forecasts warn.
The Foreign Trade specialist from the IBERO Business Studies Department, Aribel Contreras Suárez, pointed out the 70% chance for the USMCA to be ratified in the United States and Canada after the year 2020.
She explained that the disputes between the democratic and republican legislators have created false hope for the agreement to be ratified this year, which has contaminated the process, turning it into an exchange currency. And although it comes into force, the tangible results will be recognized until the revision that the agreement itself foresees every six years, she highlighted.
While in Canada it is said that the endorsement would go until the U.S. does the same, which anticipates that its approval will be after the political readjustment unleashed by the Canadian general elections on October 21, where Prime Minister Justin Trudeau seeks to re-elect himself.
The problem for our country is that in the political and electoral environment that is going to be configured with the process of political judgment, there is no perceived possibility of a bipartisan agreement for the ratification of the Treaty. All the decisions of Congress and the Executive will be tinged with an electoral tone.
Despite the launch of an impeachment investigation against President Donald Trump, House Speaker Nancy Pelosi (D-CA) urged her Democratic colleagues to focus on the ratification process of the U.S.-Mexico-Canada Agreement (USMCA).
Private initiative has indicated that it is vital to protect the validity of the North American Free Trade Agreement (NAFTA) and to prevent politicians from “getting heated” by a possible complaint about it.
A report from the Laboratory of Analysis in Trade, Economy and Business (LACEN-UNAM) highlighted that the approval of the USMCA would provide Mexico with a new legal framework to export to the United States and Canada, as well as a new pole of attraction for investment. This, together with legal certainty, would contribute half a percentage point to the growth of the national economy.
Secretary of Finance, Arturo Herrera, stated that ratifying the USMCA would allow Mexico to grow from 1.5% to 2.5% of their Gross Domestic Product (GDP) by 2020.
The U.S. International Trade Commission reported that the USMCA will bring moderate benefits to the U.S. economy, with an overall contribution of 0.35% of GDP. Official figures indicate that the North American region has 490 million inhabitants, and a combined GDP of 23 trillion dollars.