Let's make a deal: Canada, U.S., Mexico agree to tweaked NAFTA replacement
OTTAWA -- Deputy Prime Minister Chrystia Freeland has signed on to an updated text of the renegotiated North American Free Trade Agreement on behalf of Canada at a ceremony in Mexico City.
“Canada, United States, and Mexico today took an important step towards ratification of the new NAFTA deal,” Freeland told reporters at a Tuesday evening press conference, calling the amendments made an “improvement” to the trade pact that she’s now looking to pass quickly.
The agreement on the updated deal was reached between Canada, the U.S, and Mexico, and comes after U.S. Democrats secured adjustments to the deal that was first struck over a year ago. This paves the way for the new United States-Canada-Mexico Agreement to finally be ratified.
With all three countries formally agreeing to the changes, the deal is now the closest it has been to the finish line since the leaders of all three countries first signed on last November on the sidelines of a G20 summit.
A trilateral meeting and signing ceremony on the finalized revised agreement took place in Mexico’s capital on Tuesday afternoon and it featured Freeland, U.S. Trade Representative Robert Lighthizer and Mexico's Undersecretary for North America, Jesús Seade.
Speaking at the ceremony Freeland said the amendments were reached after a sometimes long and arduous negotiation process, and “will make NAFTA better.”
“Canada has worked hard to defend the interests and values of Canadians, and our three countries have worked very hard together to modernize NAFTA and to maintain key provisions that provide stability, predictability, and rules-based trade for North American consumers and businesses. And, we have accomplished it together, at a moment when around the world it is increasingly difficult to get trade deals done,” Freeland said.
Freeland — who despite no longer being foreign affairs minister has retained the responsibility for the Canada-U.S. file in part to see the trilateral trade deal through to its conclusion — says she now wants Canada to ratify it “as quickly as possible.”
The bill to ratify the deal in Canada has yet to be put on notice in the House of Commons by the Liberals, where House committees have yet to be constituted, so the runway to see it tabled, let alone advanced before Parliament adjourns for the year, is limited, unless the sitting gets extended past this Friday.
Despite this, Freeland said the bill is in the national interest and Canada should move fast to ratify it.
“That would also represent being a good neighbor and partner to our American and Mexican friends,” she said.
U.S. House Speaker Nancy Pelosi announced Tuesday morning in D.C. that after months of deliberations, her party has reached an agreement with the Trump administration to support changes to the language of the trilateral trade deal after there had been little progress in moving the renegotiated deal ahead, despite U.S. President Donald Trump touting it as a win.
The adjustments made after negotiations between the Democrats and Lighthizer’s team are not just side letter amendments, rather the original deal has been opened up and the language within it changed.
This means that Mexico, which was the only country of the three to have already ratified the deal, will need to revisit that process. In the U.S. and Canada, the path now appears clear to move forward with passing the agreement through their respective legislative bodies, something they’d planned to do in relative tandem.
The Democrats had made their support — essential to see what’s known in the U.S. as USMCA, move through the U.S. House of Representatives given their majority — contingent on changes being made.
Details of the changes to the deal were released late Tuesday and indicate that the text of the deal first signed on to by the three countries has been amended in several ways.
The updates include closing enforcement loopholes, including to Mexico’s labour compliance; removing some and inserting new language around the trade pact’s state-to-state dispute resolution settlement system; including strong language and rules around environmental protections; makes adjustments automotive rules of origin ; as well as changes related to intellectual property protections for biologic and prescription drugs that Freeland says will keep advanced medicines affordable.
“We like all the changes. Literally all of them,” said one Canadian source speaking on the condition of anonymity.
Pelosi has called the update a “victory for America’s workers,” and she credited several lawmakers, including Ways and Means Committee Chairman Richard Neal, who visited Canada to talk ratification with Prime Minister Justin Trudeau last month as being integral in getting the Democrats to a “yes.”
Neal told reporters that the updates are “transformative” and that he went into the negotiations not expecting to get as far as they did.
In his statement on the agreement, Lighthizer thanked Trump for his leadership and said that after working with both Republicans and Democrats, as well as other stakeholders, the deal “will be the model for American trade deals going forward.”
“All our teams did this, and it’s something that’s going to make North America richer, it’s going to make America richer, it’s going to make Canada richer, and it’s going to make Mexico richer,” Lighthizer said during the ceremony.
Unifor President Jerry Dias told CTV News that the turning point on getting adjustments to the labour section that were needed all along was the Democrats taking control of the House.
Dias said that the progress made on the deal should send a message to the politicians who were pushing for the Liberal government to hurry up and sign a deal last year, saying that the deal would be “much worse today than it was if we were to listen to their lead.”
In an interview on CTV’s Power Play, former Canadian ambassador to the U.S. David MacNaughton said this was “too good a deal for the Democrats to pass on,” and that he’s “delighted” to see this moment come. While an official replacement for MacNaughton has yet to be named, his former deputy Kirsten Hillman has been acting in the role since his departure at the end of the summer.
“You never know where things are going to end in Washington… But I was pretty confident we’d get this done,” MacNaughton said.
Also on CTV’s Power Play, Goldy Hyder, president and CEO of the Business Council of Canada said that while they’ll wait to see the agreement and the details of the changes, the entire years-long ratification process can be summed up as: “we gave a few things, and we got a few things but largely it’s a good enough deal.”
He said it is enough to get Canada through the next few years without reopening the deal hopefully, and “it proves business some confidence and certainty and some stability on all sides of the border.”
In late November Freeland travelled to D.C. to meet with her counterparts after it appeared that the Democrats and the U.S. administration were very close to concluding negotiations on adjustments to the new NAFTA. Since then she has remained in regular contact with her Mexican and American counterparts.
Freeland told reporters on Tuesday that her team was “on tenterhooks” all weekend, anticipating a final agreement.
In order for the deal to come into effect all three countries need to ratify it. Pelosi has indicated they’d like to move on passing the deal before the scheduled Dec. 20 end of their session of Congress, even though they introduced articles of impeachment against Trump today.
Freeland told reporters that she spoke with her opposition counterparts today to offer them a summary of the new agreement.
“I hope that they will join our government, they will join the Liberal party in working as quickly as we can to get this agreement ratified. The reality is it’s a really good deal for Canada and the more quickly we get it ratified, the more quickly benefits like a 70 per cent content requirement for North American aluminum in NAFTA cars will come into effect,” she said. “Let’s get it done.”
After the initial renegotiated deal was announced there was pushback from various industry groups and the opposition parties, who thought Canada capitulated on certain aspects.
Already, the political reaction is mixed. The Bloc Quebecois say they aren’t planning to back it.
Leader Yves-Francois Blanchet said his caucus will vote against ratifying this deal as it stands because he doesn’t think that the aluminum industry in Quebec is being adequately protected.
“Once again, the federal government has sacrificed the best interests of Quebec in order to protect some other interests of some other place in Canada,” he told reporters on Tuesday afternoon.
Conservative foreign affairs critic Erin O’Toole said Tuesday that while his party supported the previous agreement that was before Parliament last session, they have to see how substantive the changes made are before endorsing the revised deal. He said he hopes parliament will have time to study and debate the updated deal.
NDP trade critic Daniel Blaikie said his party too wants to see the details of the changes before determining how they’ll vote.
Last October Trudeau and Freeland heralded the deal—first updated after 25 years—as a preservation of many aspects of the original NAFTA, but also a deal that stabilized and modernized the trade relationship for the realities of the times.
Trudeau spoke with Mexican President Andrés Manuel López Obrador by phone on Tuesday, and according to a readout from Trudeau’s office, the two “welcomed the conclusion of the final stage of negotiations,” and agreed to stay in touch as the agreement moves through their respective legislative processes.
Some had wondered whether Trudeau’s viral diplomatic snafu of being caught on a hot mic commiserating with other world leaders about Trump last week at a NATO summit and Trump subsequently calling Trudeau “two-faced” would damage the work underway to seal this deal, but the signing indicates otherwise.
Trump’s press secretary Stephanie Grisham issued a statement calling the deal “a huge win for American workers, farmers, ranchers, labour unions and businesses that will lead to more American jobs,” and said that the “few changes” made “no doubt makes it better and stronger.”
The statement also indicated that the Republicans will “push hard” to pass the bill to implement the deal by the end of 2019.
Trudeau has yet to publicly comment on the deal being reached.
With files from CTV News' Glen McGregor, Michel Boyer, and Richard Madan.