In this episode of 60 Seconds, Brian Kingston offers insight into the CUSMA ratification process.
The U.S. House of Representatives began its summer break this week, leaving the ratification of the new NAFTA - also known as USMCA, CUSMA and TMEC - to the fall.
There are three scenarios that we see playing out over the next four months. The first is a vote. This is an ideal outcome, where the Democrats bring the USMCA to a vote in Congress in the fall, once the issues that they've raised with the agreement have been addressed. Assuming it passes, we can see the USMCA in force in early 2020. The second scenario involves withdrawal from NAFTA. This is a very concerning situation whereby the president withdraws from NAFTA in an attempt to put pressure on the Democrats to pass the USMCA. This would create considerable uncertainty for the Canadian economy and should be avoided at all costs. The third scenario is dormancy; in this situation, the USMCA is not brought to a vote in Congress before the 2020 presidential election. While preferred to a NAFTA withdrawal scenario, it would create lingering uncertainty for the Canadian economy.
No matter the outcome, trade and investment between Canada and the U.S. will remain significant. If you're interested in learning more about the importance of Canada to the U.S. economy, please check out our interactive trade map on our website.