On December 10, 2019, House Speaker Nancy Pelosi stated in a press conference that Democrats had reached an agreement with the Trump Administration on the new U.S.-Mexico-Canada Agreement (“USMCA”) intended as a NAFTA update, clearing the way for Congress to vote on the trade agreement.  Speaker Pelosi called the agreement “a victory for America’s workers” and “infinitely better” than the USMCA agreement previously negotiated.

The announcement arrived following a period of negotiations between the Administration and Democrats in the House of Representatives and signals that Democrats are now largely satisfied with the USMCA’s labor, environmental, enforcement and pharmaceutical provisions. According to Mexican President Andres Manuel Lopez Obrador, Mexico’s Senators have informally agreed to the Democrat’s new labor provisions, paving the way for ratification by Mexico. The other major components of the USMCA, such as the new rules of origin for auto manufacturing and new wage requirements, remain essentially unchanged.

Before being ratified and implemented, the USMCA needs to first be submitted to and pass the House Ways and Means Committee and Senate Finance Committee, after which it will be sent to their respective floors for a final majority vote. In total, Congress has up to 90 session days to vote on USMCA. Once USMCA is approved by the Senate, the bill will be sent to the president, signed into public law, and thereafter implemented via a presidential proclamation. Mexico and Canada also have to ratify the USMCA in their respective legislative bodies and thereafter take appropriate implementing actions.

We are monitoring this situation closely and will provide future updates as additional details become available.  If you have any questions regarding USMCA, please contact Husch Blackwell’s International Trade and Supply Chain team.