May 27, 2019 / 7:39 PM / 2 months ago

Canada takes a first step towards ratifying trade deal with U.S., Mexico

OTTAWA (Reuters) - Canada took a first step toward ratifying a new North American trade agreement on Monday just three days ahead of U.S. Vice President Mike Pence’s trip to Ottawa to discuss passage of the treaty.

FILE PHOTO: The flags of Canada, Mexico and the U.S. are seen on a lectern before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5, 2018. REUTERS/Edgard Garrido/File Photo

Foreign Minister Chrystia Freeland presented what is known as a “ways and means motion” to the House of Commons, which opens the way for the formal presentation of a bill.

The deal known as the USMCA, which would replace the 25-year-old North American Free Trade Agreement, has yet to be approved by legislatures of the three participating countries - Canada, Mexico and the United States.

The United States struck deals on May 17 to lift tariffs on steel and aluminum imports from Canada and Mexico, removing a major obstacle to legislative approval. Pence is due to meet Canadian Prime Minister Justin Trudeau in Ottawa on Thursday.

The United States is Canada’s top trading partner, taking in 75 percent of its goods exports. Reaching a new trade deal had been a priority for Trudeau’s Liberal government, and a national election is five months away.

Freeland said she had spoken over the weekend with U.S. Trade Representative Robert Lighthizer and less than two weeks ago with Mexico’s government about their ratification process.

The administration of U.S. President Donald Trump, a Republican, negotiated the deal but some U.S. Democratic lawmakers demand stronger enforcement provisions for USMCA’s new labor and environmental standards.

John Manley, a former Canadian Liberal foreign minister, said on Friday that Canada should pass the new treaty this summer.

“To fail to pass it is going to be a signal to the U.S. Congress that it is still open for renegotiations,” Manley told Reuters.

Some U.S. lawmakers have said passing the treaty would become more difficult after the congressional summer recess due to budget battles and increased campaigning ahead of the November 2020 presidential election.

Reporting by Kelsey Johnson and Steve Scherer; Editing by Phil Berlowitz and Howard Goller

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