U.S. Trade Representative Robert Lighthizer announced that the new U.S.-Mexico-Canada Agreement (USMCA) will enter into force on July 1, 2020 after the three countries reported that they have taken all necessary measures to implement and comply with their commitments.
The Trump administration announced the effective date despite calls from many North American business leaders that have sought to delay its implementation due to the economic difficulties caused by the spread of COVID-19.
“Given the pandemic’s really unprecedented economic disruption, companies will need time to adapt to the new regulations, some of which have yet to be issued,” said John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce. “Industry wants the administration to show flexibility in the months before and after entry into force so they can focus on making payroll and avoiding layoffs.”
Commercial Customs Operations Advisory Committee, a private sector committee created by Congress to advise CBP, urged the Trump administration not to implement the USMCA deal before 20201. The committee advised, “Now is not the time to implement a trade agreement that contains so many important and meaningful changes that will impact certain industries in a significant financial manner.”
In a March 30 letter, members of the Senate Finance Committee urged the USTR that the USMCA should not be entered into force until “all necessary regulations are in place and our industries have had an opportunity to understand and implement them effectively.” The senators went on to say that the COVID-19 public health crisis has caused supply chain disruptions that have left the governments and businesses “little, if any, time and resources to prepare for a smooth transition to USMCA.
Despite the pushback, Trump officials have been undeterred in their efforts to implement the deal as soon as possible. “The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America. The USMCA’s entry into force is a landmark achievement in that effort,” said Lighthizer.
- Politico, North American trade deal to take effect on July 1
- Sandler, Travis & Rosenberg Trade Report, USMCA to Enter Into