Canada ratifies USMCA - but will pandemic threaten implementation?

Legislation | | MIC Customs Solutions |

The coronavirus pandemic has prompted Canada to hurriedly ratify the USMCA after months of delays.

Canada has become the last country to officially ratify the US-Mexico-Canada Agreement (USMCA), but experts are concerned the outbreak of coronavirus may leave little time to iron out the kinks.

The North American nation signed the deal into law late last week before its government implemented a five-week shutdown to halt the spread of COVID-19, meaning it can finally now replace NAFTA.

"Now that the USMCA has been approved by all three countries, a historic new chapter for North American trade has begun," commented US trade representative Robert Lighthizer.

Until now, procedural delays in Canada had meant the deal remained stuck in the Foreign Affairs and International Trade Committee, despite the US and Mexico having already ratified it.

A three-month period can now begin during which negotiations will take place to decide upon the rules and regulations within the USMCA.

However, concerns have already been raised that with governmental shutdowns in operation and countries being forced to concentrate on emergency measures to battle coronavirus, this will not leave enough time.

In particular, trade groups that represent automotive firms have said they are worried about a potential 'entry-into-force' deadline of June 1st 2020 that is being floated by US president Donald Trump.

The American International Automobile Dealers Association and the National Automobile Dealers Association have pointed out that no uniform automotive rules-of-origin regulations have yet been issued even in draft form, for example.

Meanwhile, the Automotive Parts Manufacturers' Association in Canada suggested January 1st 2021 might be a more appropriate deadline under the circumstances.

Senate Finance Committee chairman Chuck Grassley has also recommended a delay on plans for implementation, noting that the COVID-19 outbreak could significantly disrupt supply chains and hinder the writing of rules, the Washington Examiner reports.

There have now been more than 186,000 cases of coronavirus reported worldwide.