New NAFTA bill to be tabled soon, PM promises to keep pace with U.S. ratification
Published Tuesday, May 28, 2019 9:53AM EDT
Last Updated Tuesday, May 28, 2019 3:31PM EDT
OTTAWA – Prime Minister Justin Trudeau is poised to table the legislation to implement the renegotiated NAFTA deal, within days and is set to push ahead on trying to pass the major trilateral trade deal in the dying days of this Parliament.
Trudeau has placed the bill, "An Act to implement the Agreement between Canada, the United States of America and the United Mexican States" on the House of Commons notice paper, meaning it could be tabled by the time U.S. Vice President Mike Pence visits Ottawa to discuss ratification on Thursday.
It remains to be seen how quickly the federal government will march on in moving the legislation through the various stages of debate and committee study, though with just three scheduled sitting weeks left in the House, time is limited unless the Liberals decide to extend the sitting.
Speaking with reporters on his way into a cabinet meeting on Tuesday morning, Trudeau said they will "be aligning ourselves very much with the pace of the American administration."
"We're looking forward to having great conversations as we move forward with the ratification process," Trudeau said of the renegotiated agreement, known as USMCA, or CUSMA depending on what side of the border you are on.
In order for the deal — which was reached in late September and signed in November after nearly 14 months of negotiations — to come into force, it needs to be ratified by all three countries in their respective legislative bodies.
With the U.S. agreeing to lift its steel and aluminum tariffs off of Canada and Mexico, the prospect of the deal being ratified was given new life earlier this month.
"The deal as it is, is a good deal for Canadians, it's a great deal for people across the country, we're going to keep moving forward," Trudeau said.
Facing questions about the prospect of passing the bill before the end of this session, Government House Leader Bardish Chagger said that "when there's willing partners wanting to work together in this place anything can happen."
"We know that it’s in the best interest of Canadians… we want to see that legislation move forward," she said
Both Chagger and Finance Minister Bill Morneau echoed Trudeau's remarks on the timing on Tuesday, offering similar comments about heading down the ratification path in lockstep with the other two countries.
On Monday, Foreign Affairs Minister Chrystia Freeland took the final legislative step before tabling the bill, presenting a "ways and means" motion that is required anytime legislation that impacts taxation is to be introduced.
That motion passed with support of the Conservatives in a vote 225-47 on Tuesday afternoon, offering the first indications of the House support there will be for advancing this new deal.
Passage of this motion essentially clears the way for the Commons to consider the ratification bill, which could be introduced as early as Wednesday.
Freeland said she had a "very productive discussion" with her cabinet colleagues on the new deal's ratification path on Tuesday.
Freeland has said that she is also keeping in close communication with her Mexican and American counterparts as both countries also move towards ratification, though Canada is not feeling a great rush considering that the existing NAFTA will remain in place until all three countries ratify.
In the U.S., Democrats have said that the deal without changes won't have their vote, and Congress is largely consumed by the increasingly acrimonious fight between U.S. President Donald Trump and House Speaker Nancy Pelosi.
Despite this, Canada's Ambassador to the U.S. David MacNaughton recently told CTV's Question Period that he expects U.S. Congress to pass the renegotiated USMCA deal by the end of July, when the summer sessions wraps up.
MacNaughton attended Tuesday's cabinet meeting. Speaking with reporters afterwards he said that he's met with "many Democrats," and thinks there are encouraging signs that movement will be made south of the border soon.
It is expected that the path ahead for the trade deal in both countries will be top of the agenda when Canadian officials meet with Pence later this week.
As a reminder, here are the key points of the new NAFTA that will be reflected in this coming legislation:
- The Chapter 19 dispute resolution mechanism remains intact, though, it has been renumbered in the new 34-chapter agreement. This part of the deal allows for independent panels to resolve trade disputes that arise out of the deal. It was a red line for Canada, which feared not having an objective arbiter, despite the U.S.'s push for changes.
- American farmers will have increased access to the supply-managed Canadian dairy market. Specifically, Canada has increased the market access to 3.59 per cent, and the federal government agreed to get rid of what was known as Class 7 pricing on some dairy ingredients. The Americans are viewing this as “a big win” for them. It’s a bigger concession than what Canada made in the Trans Pacific Partnership.
- Canada maintained the original NAFTA text related to an exemption for cultural industries, which is aimed at protecting such things as Canadian media and bilingual content.
- Under the USMCA trade deal, online cross-border shipments to Canada worth less than $150 will no longer be subject to duties. The deal raises the minimum purchase price that qualifies for duties and taxes, known as the de minimis threshold, up from $20 to $40.
- The deal includes 12 side letters on issues including wine, water, and cheese names.
- The new deal also has new measures the government says will help Canada’s natural resources sector; as well as a new environment chapter with measures related to air quality and marine pollution.
- The deal includes stronger rules of origin for autos, and an “ambitious” slate of other provisions related to the digital age.
- It includes a termination provision aimed at preventing the deal from becoming outdated. It states that the deal is good for 16 years after it comes into force, but within the first six years a mandatory “joint review” will be conducted to determine whether all three countries want to extend the agreement for another 16 years. It maintains the six month opt-out of the deal notice that existed in NAFTA.
- The investor-state dispute settlement process (ISDS) is also being phased out between Canada and the United States, which Freeland said has cost Canadians millions in legal fees.
- The U.S. has given Canada assurance that an exemption — should Trump follow through on a 25 per cent tariff on autos — would be granted for 2.6 million vehicles and US$32.4 billion worth of auto parts.