While the United States-Mexico-Canada Agreement was drafted in 2018, lawmakers in the U.S. are still debating whether to ratify the agreement that is meant to replace the North American Free Trade Agreement, or NAFTA, from the 1990s. Mexico is the only nation to ratify the agreement so far.
If fully ratified, the trade agreement would have a significant impact on Texas’ economy. Daniel Ujczo is an Ohio-based international trade and customs lawyer for the firm Dickinson Wright, and says the current political climate in the United States is making it difficult for Congress to ratify the agreement known as USMCA.
“With the impeachment investigations, it’s going to create some stalemate,” Ujczo says. “We don’t have a lot of time in which to get this through Congress. … The whole idea is to get this done before the 2020 election cycle.”
According to Ujczo, if USMCA isn’t ratified within the next 20 days, its fate will be determined by the new Congress after the 2020 elections. Until USMCA is ratified, NAFTA will stay in place.
“What we’re more likely to see is a blame-and-bump scenario,” Ujczo says, “where each side bumps this down the road and blames the other one. The President would blame Speaker Pelosi, and Speaker Pelosi would blame the president.”
Mexico’s Senate ratified the USMCA in June, and Canada is waiting for the U.S. to ratify before it moves ahead, Ujczo says.
Uncertainty about the USMCA worries Texas farmers and manufacturers, who are also dealing with the effects of the United State’s ongoing trade war with China. But Ujczo says they should be reassured that NAFTA will remain in place until USMCA is finalized.
“We’re seeing all kinds of hits to the economy,” Ujczo says. “The good news is that we will, at least, keep the current NAFTA in place. Companies can rely on that do their business planning. We don’t see a scenario where there’s neither NAFTA nor the new USMCA.”
Written by Antonio Cueto.