5. North American Free Trade Agreement (NAFTA) Disputes

Abstract

The final ratification of the USMCA has been a cause of concern for all three parties. The United States, for its part, needed the nod of the majority in the House of Representatives. During the review period that followed the signing in 2018, the USMCA had been extensively scrutinized by both of the parties in the US House of Representatives. Certain basic reservations have been explicated as far as effective enforcement for environmental provisions is concerned. Nancy Pelosi, speaker of the House of Representatives, formed a sub-committee headed by Richard Neal to work in unison with the Office of the US Trade Representative (USTR) Robert Lighthizer in order to advance a consensus on the USMCA and ratify it. After engaging with some emerging critical issues, a consensus was reached on 19 December and a Protocol of Amendment to the Agreement between the United States of America, the United Mexican States, and Canada (Protocol of Amendment) to alter certain provisions of the agreement was announced (<https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cusma-aceum/text-texte/toc-tdm.aspx?lang=eng>). Gaining a majority of 385 to forty-one, the agreement was then voted for by the US Senate with a majority of eighty-nine to nineteen. Mexico was prompt in its ratification of the USMCA on 16 June and was also swift in ratifying the Protocol of Amendment in December.

Unlike Mexico, Canada strategically tied its domestic ratification in tandem with the ratification of the USMCA by the United States. It was only after the US Senate ratified that Canada commenced its ratification process. As a result, the ratification process is expected to take several months to conclude, and the UMSCA will come into force by mid-2020s. Once ratified by all three states, the agreement will come into force, and proactive measures to implement the USMCA’s requirements will be undertaken. Apart from making the requisite legislative and bureaucratic arrangements, the parties would need a buffer period to prepare the state machinery to respond to the renewed deal. A preparation period of several months can be expected after the ratification of the deal by Canada.