US senators seek delay to June 1 start of USMCA deal

US senators seek delay to June 1 start of USMCA deal

Economy & Policy Regulation Canada Mexico US Latin America Coronavirus

US senators, in a bipartisan call on the Trump Administration are asking to delay the start date for the US-Mexico-Canada trade deal due to go into effect on June 1st, citing the added burden of trying to meet compliance rules while the novel coronavirus, COVID-19 rages across the region and disrupting economic activity.

In a letter released by Senator Chuck Grassley, Republican of Iowa, the senators asked US Trade Representative Robert Lighthizer to delay the trade pact to ensure it does not go into effect before all sides are able to abide by its rules given how the pandemic has limited the resources and time necessary for a smooth transition to the new trade rules.

"Even absent the pandemic, a June 1 deadline would be highly aggressive, and raises questions as to whether businesses have the information they need to adjust to the new rules and comply by that date. Entry into force should only happen after all necessary regulations are in place and our industries have had an opportunity to understand and implement them effectively," said the letter, which was released on Monday by Grassley's office.

The USMCA trade pact replaces the 26-year old North American Free Trade Agreement. The 19 senators who signed onto the letter also said they wanted to make sure both Mexico and Canada were in compliance.

Grassley is the chairman of the Senate Finance Committee. He was joined by the ranking member Ron Wyden, a Democrat from Oregon in calling for the extension beyond the June 1st date.

"Before USMCA enters into force, the United States must have confidence that all three parties have fulfilled their respective obligations. A long experience of incomplete and inadequate implementation by trade agreement partners has taught us that the United States must do this work on the front end to ensure that the words on paper deliver genuine benefits to Americans, including our farmers, workers, and businesses.

“USMCA should not enter into force prematurely – particularly in light of the COVID-19 pandemic – and thereby deny American farmers, workers, and businesses its intended benefits. We ask you to delay the proposed June 1 entry into force and work with Congress and stakeholders to determine a more feasible timeline," the senators wrote.