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Law360 (March 18, 2020, 2:20 PM EDT ) The Trump administration's plan to quickly enact a new trade deal with Mexico and Canada by June drew a firm rebuke on Wednesday from opponents who stressed that the process has been upended by the spread of the novel coronavirus.
All three countries have ratified the U.S.-Mexico-Canada Agreement, but must now align their internal rules and regulations to ensure that it can enter smoothly into force. That process is especially crucial for the automotive industry, as the USMCA has drastically tightened the rules covering tariff treatment in that sector.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said in a floor speech that the administration is aiming to set the deal in place by June 1. He cautioned that such a timeline is too ambitious for an already taxed auto sector that is scrambling to address the threat that COVID-19 poses to its workforce and supply chains.
"As we learned in 2009, the health of the auto industry is critical to the health of our economy," Grassley said. "I urge the administration to take seriously the concerns expressed by the highest levels of the auto industry to ensure a reasonable timeline for entry into force of the USMCA auto regulations."
The Office of the U.S. Trade Representative did not respond to a request for comment.
Finance Committee ranking member Ron Wyden, D-Ore., did not address the coronavirus threat specifically, but cautioned generally against implementing a trade deal too quickly.
"A trade agreement should only enter into force when facts indicate that our trading partners are complying with the obligations in the agreement, not an arbitrary date determined by political motive," the senator said in a statement to Law360.
The USMCA does not have a firm deadline for implementation once all three governments have ratified the deal. Rather, the countries must notify one another when the relevant rule changes have been made to comport with the text of the agreement, and it will enter into force "on the first day of the third month following the last notification," or roughly 60 days.
Former Mexican trade negotiator Kenneth Smith Ramos, took to Twitter Wednesday morning noting that the novel coronavirus has already disrupted a number of meetings related to implementation and that time is running out for the U.S. to meet its June 1 goal.
"For June 1, they would have to notify in the next few days #NotHappening," he wrote, according to an unofficial translation.
Still, Ramos did say that the USMCA should put into action "as soon as possible to try to reduce the uncertainty" caused by the virus.
Mexican and Canadian trade officials did not respond to requests for comment Wednesday.
--Editing by John Campbell.
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