On September 30, 2018, the United States, Mexico and Canada reached consensus on updating NAFTA, and on November 30, 2018, US President Donald Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto signed the agreement. Before the agreement takes effect, however, each country’s governments must ratify it.
The CUSMA would be the first major trade agreement of President Trump’s term, but US congressional approval is not certain. Republican members of Congress have expressed dissatisfaction with the sunset clause, restrictive rules of origin and the elimination of the investor dispute mechanism. Democrats have indicated a desire for even stronger labour and environmental protections.
The anti-trade rhetoric was common to both Hillary Clinton and Donald Trump’s 2016 presidential campaigns. To some extent, therefore, we should expect that each side will want to show follow-through on campaign promises for so-called fair trade deals. The CUSMA includes provisions on labour, wages, the environment, digital trade, as well as those specific to the auto and trucking sectors, all of which are likely to appeal to the Democratic base and would make it difficult for them to oppose the deal.
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