U.S. government shutdown delays ratification of new NAFTA

Washington's International Trade Commission has confirmed that a key analysis required before the U.S. Congress ratifies the revised North American trade agreement has been delayed by 35 days because of the government shutdown.

Mandatory study of deal's economic impacts put off by 35 days

U.S. President Donald Trump touches Prime Minister Justin Trudeau as they prepare to sign a new agreement replacing the NAFTA trade deal during a ceremony before the G20 summit in Buenos Aires Nov. 30. Ratification has been delayed because of the U.S. government shutdown. (Martin Mejia/The Associated Press)

Washington's International Trade Commission has confirmed that a key analysis required before the U.S. Congress ratifies the revised North American trade agreement has been delayed by 35 days because of the government shutdown.

"All investigations that were ongoing at the time of the lapse in appropriations will be [delayed] by 35 calendar days," ITC spokesperson Peg O'Laughlin said in an email to CBC News.

All of the ITC's work came to an abrupt halt during the shutdown, and more details on the revised schedules for its various investigations will be posted "in the coming days," she said.

The shutdown ended provisionally on Jan. 25, when U.S. President Donald Trump signed a bill funding the government for three weeks while Republicans and Democrats negotiate how to address security along the U.S.-Mexican border.

The U.S. Congress has constitutional authority over trade matters, but delegates responsibility for negotiating treaties according to the terms of trade promotion authority (TPA) legislation, often called the "fast track" bill.

If the steps laid out in the TPA are followed, Congress doesn't amend a signed treaty like the new NAFTA, but simply holds votes on whether or not to approve it.

A key step in the process was cleared Tuesday in Washington, when United States Trade Representative Robert Lighthizer met a 60-day deadline for notifying Congress of the changes in law that are necessary to bring the U.S. into compliance with the text of the agreement Trump signed with Mexico and Canada on Nov. 30.

The next step is the requirement for the ITC to report to Congress on the potential economic impacts of the new NAFTA, as well as what it could mean for specific sectors of the American economy. When ITC analysts were put on furlough, however, its ability to deliver that report on time was put in jeopardy.

The TPA legislation specifies that the ITC is supposed to report within 105 days of the U.S. entering into the agreement (the signing ceremony). Other reviews of its environmental and employment impacts are also required at the time the final legal text of the agreement is presented to Congress.

Key people in both the Democratic and Republican parties have indicated that they want to have the ITC's analysis in hand before they proceed with ratification votes.

While Lighthizer has often spoken of his efforts to put enough measures in the new agreement to win support on both sides of the aisle, other voices in Congress — particularly Democrats, who now control the House — have indicated they want to see changes to the deal, or add specific assurances to its implementation legislation, before they consider approving it.

An implementation bill has not yet been introduced in the House of Representatives or in the Senate.

Canada's lobbying continues

While Lighthizer originally voiced optimism that Congress could be considering ratification by March, that timeline now appears to have been pushed back to mid-April at the earliest.

Canada's embassy in Washington continues to reach out to members of Congress to underscore the economic necessity of having a North American trade deal in place, amid threats from President Trump to simply pull out of the existing NAFTA if Congress isn't willing to ratify the changes negotiated in NAFTA 2.0.

While American politicians may talk about wanting this or that fixed before it's finalized, Congress can't change the text that was signed — it only votes yea or nay.

If the deal does not pass, it's not clear whether Canada and Mexico would be willing to reopen negotiations to try to get a deal that could be ratified by Congress.

In the meantime, trade continues under the terms of the original NAFTA.

Despite Trump's threats, it's unclear that a majority in Congress is in favour of unraveling arrangements that — at least until last year's introduction of "national security" tariffs on steel and aluminum — enable the vast majority of goods traded between the three countries to cross borders tariff-free.

Beyond the embassy's co-ordinated lobbying push, U.S. ratification timelines are out of the Canadian government's hands.

Canada tabled the text of the new Canada–U.S.–Mexico Agreement (CUSMA) in Parliament before Christmas. According to the Canadian protocol for ratifying trade treaties like this, the earliest an implementation bill could be introduced in the House of Commons is mid-March.

On Parliament Hill Wednesday, Conservative international trade critic Dean Allison urged the federal government to push harder for an end to the steel and aluminum tariffs — something Trump suggested would follow a successful re-negotiation of NAFTA, but hasn't happened yet.

"There's really a crisis out there," he said, citing the tariffs' impact on manufacturers.

"I think there's more that Mr. Trudeau could do on this side, to help us understand where we're going on the deal."


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