What a Democrat-controlled House means for the new NAFTA deal

Senior Canadian government officials are throwing cold water on speculation that the shift in Washington’s complex power structure as a result of the United States midterm congressional elections might put the painstakingly renegotiated North American Free Trade Agreement in jeopardy.

A government official with detailed knowledge of the policy and strategy of Prime Minister Justin Trudeau’s trade team said their expectation is that the Democrats, who won control of the U.S. House of Representatives, likely won’t try to pick a fight with President Donald Trump by blocking the United States Mexico Agreement (USMCA), the successor to NAFTA.

Some observers have predicted Democrats might flex their muscle by pushing for the deal to be revisited to strengthen certain parts, perhaps including provisions on labour rights. But there’s no mechanism to make targeted changes to satisfy the new majority in the House—and the Trump administration, like the Canadian and Mexican governments, will not want to risk reopening the whole, complex agreement, which took 13 arduous months of bargaining to finalize.

The Canadian official, who spoke to Maclean’s on condition of anonymity, said the Trudeau government continues to expect USMCA to be signed, in all likelihood, as previously planned on Nov. 30. That’s the earliest date, under U.S. law, that Trump can sign the agreement reached in principle on Sept. 30. As well, Nov. 30 is the final day Mexico’s outgoing president, Enrique Pena Nieto, holds power before inauguration of the country’s president-elect, Andres Manuel Lopez Obrador. Mexico would prefer that Pena Nieto sign the deal negotiated under his leadership...

This is excerpted from 7 November 2018 edition of Maclean's Magazine.