USCMA to Enter into Force on July 1 Following Canada’s Rushed Ratification Earlier This Year
On April 24, 2020, USTR Robert Lighthizer announced that the USMCA would enter into force on July 1 of this year, one month later than was previously agreed upon.
The agreement, which replaces the NAFTA, was ratified by Mexico in June 2019. Following changes to the text to address concerns raised by US Democrats related to the stringency of labour and environmental provisions, the United States House of Representatives passed the agreement on December 19, 2019.
Following a delayed parliamentary vote due to the country’s 2019 election, the agreement was tabled for debate in the Canadian Parliament in January 2020. While the agreement faced opposition from the Conservative party, with the support of the left-leaning NDP the ruling Liberals managed to fast-track a vote on the agreement before Parliament before was suspended on March 13, 2020, over concerns regarding the COVID-19 pandemic.
However, in light of the global pandemic, some US Senators, automakers’ associations, and Mexican officials have requested a delay in implementation of the agreement until January 2021, citing time needed to update supply chains to comply with new rules of origin requirements in the new agreement. Under the agreement, 75% of auto content must be produced in North America. However, the pandemic has shuttered many auto factories across the continent, which may create difficulties for manufacturers in complying with the initial requirements of the agreement.
To date, no delay has been agreed upon.