[CTC] Report: Canada's NAFTA bill designed to give government flexibility to react to U.S. actions

Wed May 29 12:20:05 PDT 2019

Report: Canada's USMCA bill designed to give government flexibility to react to U.S. actions

Inside US Trade
05/29/2019

USMCA legislation expected to be introduced in Canada's Parliament this week is designed to allow the Canadian government to respond later to changes the U.S. might try to make to the deal, according to a report from Canada.

CBC News reported on Tuesday that the legislation, which is expected to be introduced on Wednesday – one day before Vice President Mike Pence will meet in Canada with Prime Minister Justin Trudeau – was crafted to give the government some wiggle room.

Citing the proposed text, CBC said it is written to give the federal cabinet the ability to make changes it “considers necessary for the purpose of implementing, in relation to drugs, Articles 20.48 to 20.50 of the Canada-United States-Mexico Agreement.”

Those articles cover biologic drugs, a key issue for Democrats in Congress.

CBC notes that a bill giving the government the ability to modify the legal changes needed for USMCA would solve a timing issue for Canada. The Canadian Parliament is set to be in session for just four more weeks before breaking for the summer. It is not slated to reconvene before Canada's federal elections, which must take place no later than Oct. 21.

During that time, the federal cabinet would be authorized, under the USMCA bill proposed this week, to adjust based on what the U.S. does.

“It is not surprising that the government would preserve flexibility in the [NAFTA] implementation bill to accommodate the remaining uncertainty in the U.S. approval process, while helping to move the ball down the field,” said trade lawyer Mark Warner in the CBC article. “It's the smart way to go at this stage.”

Parliament on Tuesday overwhelmingly approved a motion permitting the Trudeau government to introduce USMCA.

CBC also reported that the Trudeau government's plan for USMCA has its critics, with Conservative Erin O'Toole saying the prime minister was “accepting the deal as the U.S. presents it on any given day.”

“We don't want to lock ourselves into a worse outcome,” he said, according to CBC, adding: “It's probably prudent, but also recognizes that much of this has been take-it-or-leave-it.”

Prime Minister Justin Trudeau said on Tuesday that the timelines for USMCA ratification in Canada and the U.S. would be closely aligned.

According to Trade Promotion Authority law, the Trump administration must send a draft statement of administrative action and the final text of the agreement 30 days before sending the final implementing bill. The draft implementing bill is typically worked on in conjunction with the draft SAA.

Once the final implementing bill is submitted, the House Ways & Means Committee is required to vote on it within 45 session days. The House must act within 15 session days of the committee vote. The Senate Finance Committee is required to vote on the bill within 15 session days of the House vote, and the Senate must act within 15 session days of the Finance Committee decision.

The implementing bill is subject to a mandatory introduction, automatic discharge from the committee, a time-limited floor debate and an “up or down” simple majority vote, according to TPA.

Sources have flagged the 30-day window between the submission of the draft statement of administrative action and the delivery of the final implementing bill as a time frame in which the administration has some flexibility. “The end of July is their sweet spot,” one source told Inside U.S. Trade, adding if Trump hopes to get USMCA approved by Capitol Hill this year, the draft SAA “needs to go up by the end of June.”

House Ways & Means trade subcommittee Chairman Earl Blumenauer (D-OR) has warned against “rushing” the SAA. House Speaker Nancy Pelosi (D-CA) has issued similar warnings.

The 2015 TPA law also includes two options for Congress to “deny expedited consideration of an implementing bill should it determine that there was inadequate consultation or progress towards achieving negotiating objectives,” according to the Congressional Research Service. “Each Chamber also retains the right to exercise its constitutional rulemaking authority to change TPA rules or override them.”

“Although TPA legislation does not explicitly define these steps, they provide for public review of the proposed agreement and allow the President to receive feedback and concerns from Congress, which are, nonetheless, nonbinding on the Administration,” the CRS report adds.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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