Saturday , April 1 2023

Implications of US multiple choice on the USMCA


Concluding the NAFTA review negotiations led to a slightly lesser trade situation in North America. However, congressional approval of trade agreements is always close. The Democratic control of the House contributes to the uncertainty whether the USMCA will be approved by the Congress in the new year and whether it will become a chip for negotiations in other legislative struggles. Another joker is the extent to which the Trump administration can resort to bargaining to approve the USMCA agreement, for example, threatening to simply withdraw the United States from NAFTA.

Generally speaking, we can expect greater congressional oversight of the role of the Executive Branch on Trade Issues, in particular from the Committee on Roads and Funds. It is unclear, however, whether this will turn into the side of the presidential power over unilateral trade measures such as sec. 232 tariffs imposed by the administration on Canadian steel and aluminum and threatened to be imposed on cars, especially since the Republicans strengthened their position in the Senate.

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