Mexican Senate ratifies USMCA

The Mexican Senate approved the implementing legislation for the United States–Mexico–Canada Agreement (USMCA) on June 19, 2019, by an overwhelming majority of 114 votes in favour, with less than a dozen against or abstaining.

The vote came just over a week after Mexican President Andrés Manuel López Obrador announced the extraordinary Senate session for the vote on replacing NAFTA with the USMCA.

The USMCA negotiations wrapped up in September 2018, just over one year after the three countries began formal talks to update NAFTA. The leaders of the three countries involved signed the deal in late November 2018. Among the notable changes to the 1994 NAFTA text was the revised ISDS language. The changes would limit the application of ISDS only to disputes involving Mexico and the United States and outline which types of claims investors can make under that provision.

The USMCA needs to be ratified by all three signatories, after which three months will need to pass before the agreement’s entry into force. The Mexican process is currently the most advanced.

The office of the Canadian Prime Minister submitted Bill C-100 to the Canadian House of Commons on May 29, 2019, which would be the implementing legislation for the USMCA in Canada. A first reading was held that day, followed by a second reading on June 11, 2019. The implementing legislation still needs to undergo several further steps, including being approved in both the Canadian House of Commons and Senate, before ratification is complete in that country.

U.S. Vice President Mike Pence said in May that the White House is hoping for Congress to ratify USMCA promptly, ideally completing that process before the end of the summer. The Office of the U.S. Trade Representative (USTR) has already sent a draft statement of administrative action on the USMCA, which Speaker of the House Nancy Pelosi said in late May was premature.

“We all agree that we must replace NAFTA, but without real enforcement mechanisms we would be locking American workers into another bad deal,” said Pelosi, adding that the Democratic Party, which holds a majority in the House, has “been on a path to yes.” Under the U.S. Constitution, any legislation that involves the raising of government revenue, including trade agreements, must begin in the U.S. House of Representatives before being voted on in the Senate.