The Trump Administration is pushing very hard to have the US Congress move forward with the ratification of the United States Mexico Canada Agreement (USMCA). Having just returned from Washington, D.C. and participating in briefings and discussions with members of Congress and business leaders, it was encouraging to hear both the Canadian and Mexican Ambassadors to the United States convey a similar message, that ratification of the USMCA is urgent and critical to the economic future of the North American neighbors.
The significance of the trading relationship among the three signatory countries cannot be overestimated. With 11 million U.S. jobs dependent on the $1.3 trillion in North American trade, the impacts to all three economies are significant. But the impacts go far beyond the numbers. As Ambassadors Robert Lighthizer, U.S. Trade Representative, has stated, the ability of the United States to successfully negotiate trade agreements with other countries and regions of the world, like Japan and the European Union, are also at stake. If the U.S. negotiates an agreement that is not ratified by Congress, then why would other countries agree to concessions that may be difficult to approve in their respective countries only to have the agreement not come to fruition because of the Congressional process.
For Mexico and Canada, the U.S. represents their largest market. Both Ambassadors stressed that Canada and Mexico are also the US’s largest markets. With the continued projections for long-term growth in Mexico and Canada, the importance of this trinational relationship can only grow.
Ambassador Martha Barcena of Mexico noted that the border regions play a critical role in the future of the trading relationships, urging that our border regions become centers of innovation in order to facilitate trade, commerce and tourism. The 10 U.S. and Mexican states that comprise the U.S.-Mexico border region combined, are equivalent to the 4th largest world economy. Ambassador David MacNaughton stressed that the U.S. and Canada have a unique relationship and that trade and business opportunities flow in both directions. Both Ambassador Barcena and Ambassador MacNaughton are busy walking the hallways of Congress meeting with as many members as they can in order to move the ratification process forward as quickly as possible.
During our daylong event in Washington, D.C., many experts and presenters indicated that the longer that the ratification process is delayed, the more complicated it can become – particularly if the process is delayed enough to fall into the upcoming election cycle. They also made it clear that there is little incentive for Mexico and Canada to move towards ratification themselves until they have a clear sense as to the U.S. Congressional process.
There is much at stake for all three countries in the USMCA, the modernized version of the 25-year-old North American Free Trade Agreement, including the competitiveness of North America vis a vis the rest of the world. The U.S. and its North American partners remain the best and most desired market in the world. The USMCA will ensure that we will remain at the top of the list for decades to come.
Luis Ramirez is the President of Ramirez Advisors Inter-National, LLC, a highly specialized firm on crossborder initiatives and governmental affairs.