U.S. Senate passes new North American trade deal

The United States Senate overwhelmingly approved a revised North American trade pact on Jan. 16.

The U.S.-Mexico-Canada Agreement, or USMCA, passed by a vote of 89-10. The trade pact, signed by President Trump in November 2018, received a similar bipartisan vote by the U.S. Congress in December 2019.

The USMCA is meant to replace the North American Free Trade Agreement, negotiated in the 1990s. USMCA makes several tweaks to the North American Free Trade Agreement, which took effect in 1994. USMCA creates stricter rules for auto part rules of origin, and requires at least 40 per cent of the parts for a car to be produced in plants where workers make at least US$16 an hour. It also gives American producers better access to Canadian dairy markets; updates digital trade and copyright rules; and includes provisions to protect the ozone layer, marine environment and air quality and establishes a fisheries management system to prevent overfishing in North American waters.

News of the Senate’s approval drew a quick, positive response from the U.S.-based Plastics Industry Association. “This agreement will bring our nation’s trade infrastructure into the 21^st century,” president and CEO Tony Radoszewski said in a statement. “The United States-Mexico-Canada Agreement is a trade deal that will benefit every American company, increase access to new markets, create new jobs and enhance the already robust relationships we have with our continental neighbors. We look forward to the president’s signature of the USMCA and look forward to the growth and innovation it will inspire in the plastics manufacturing industry.”

After Trump signs the three-nation pact, it needs only Canada’s approval to take effect.

The Senate’s passage of USMCA came one day after Trump signed “phase one” of a new trade deal with China, easing trade tensions between the two largest economic powers in the world. That agreement does not require congressional approval.