Business groups urge delay in implementation of USMCA trade deal, citing pandemic

Business groups urge delay in implementation of USMCA trade deal, citing pandemic

Canadian business groups are joining counterparts in the U.S. and Mexico in asking for a delay in the implementation of the new U.S.-Canada-Mexico Agreement that replaces NAFTA, saying it’s unfair to ask companies to adjust to new rules during a deadly pandemic.

The Trump administration has talked about making June 1 the entry-into-force date for all elements of the USMCA including new regional content rules for autos.

Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said the imposition of new rules, driven by the U.S., on companies “that are in an unprecedented shutdown because of a global pandemic” would be disastrous.

His organization and counterparts in the United States and Mexico are urging all three governments to work together to delay enforcement of new trade rules. They’re asking for a delay until January 2021.

Mark Agnew, senior director of international policy at the Canadian Chamber of Commerce, the country’s largest business lobby, said they would like to see a pause.

“All new regulatory processes that are not critical need to be paused,” Mr. Agnew said. “The government needs to be talking to businesses about what a grace period or phase-in approach might look like.

He said the Chamber understands U.S. President Donald Trump wants to have the USMCA in force before fall elections, but he said there must be a way to delay new obligations on companies. “Under normal circumstances, companies could rush to make it happen. But you have all sorts of business that are closed. You have workers going into self isolation. And those that are working are pulling their hair out because of COVID.”

More to come