T-MEC in trouble: analysts warn of the difficult ratification of the trade agreement to replace NAFTA

The three North American countries have concluded what is known as the United States, Mexico and Canada Agreement (USMCA, by its acronym in English, and known as T-MEC) September 30, ending a year of difficult negotiations following the request of President Donald Trump to renegotiate or cancel the previous trade pact, the NAFTA (NAFTA).

But the USMCA has not put an end to the commercial difficulties of the region and, If ratification is delayed much longer, it could become hostage to electoral politics before the presidential election in the United States in 2020 and that Canada will go to the polls in October.

This delay means that companies are still unsure of the framework that will govern investments in the region.

"The USMCA is in troublesaid Andrés Rozental, Mexico's former foreign secretary for North America, although he believes the agreement will eventually be approved.

The Canadian Parliament must also ratify the treaty, but officials say the times are pressing. Current legislators have only a few weeks of work before the start of the judicial holidays in June and members of the new Parliament would have little chance of tackling ratification before 2020.

In addition, Trump threatened to withdraw from the old pact, the North American Free Trade Agreement (NAFTA), if the Congress is not in a hurry. If the White House abandons the agreement, the three countries will return to the trade rules before 1994.

Canada and Mexico request an exemption from United States customs duties last year on metal imports.

As taxes on metals are not included in the USMCA, both countries are eager to solve the problem. Mexico repeatedly threatened to retaliate against new US products if customs duties were imposed.

Until Thursday, Trump reiterated that he was going to impose tariffs on Mexican auto exports Unless Mexico collaborates in the fight against illegal immigration and the arrest of drug traffickers.

Mexico said it was considering a list of products subject to retaliation for US tariffs on Mexican steel and aluminum, said Luz Maria de la Mora. , Mexico 's deputy foreign trade secretary, adding that it would be finalized by the end of the year. April

"There will be everything," he told Reuters, without specifying in detail how a list including the origin of bourbon, various types of cheese, pork legs, steel and other elements could be modified.

From the Mora said that "all the options are on the table "whether Mexico will ratify the treaty if tariffs on metals persist.

In Ottawa, Foreign Minister Chrystia Freeland said this week that her government was "constantly" reviewing its own retaliation list, noting that Trump's tariffs left a margin of more than C $ 16 billion to respond.

Freeland did not specify when the list of products could change, but a government source who requested anonymity said that it might not be necessaryalthough she argues that Canada coordinates its options with Mexico.

The Prime Minister Justin Trudeau, who faces a tough battle for his reelection, rejected Thursday the acceptance of Canadian quotas on steel and aluminum. in exchange for lower US rates.

In negotiations with the USMCA, Trudeau was criticized for allowing Trump access to the Canadian dairy sector.

A bill already in the Mexican Congress to strengthen the unions It should be approved this month, the government recently said.

Trump has blamed NAFTA for the loss of millions of jobs in the United States by hijra in Mexico to employ businesses with cheaper labor.

"As the problem approaches, it will be difficult for Democrats to recognize Trump as a victory."Upon ratification of the USMCA, said Sergio Alcocer, former Under-Secretary for Foreign Affairs of Mexico.

Some democrats are urging to change the agreement, an idea that Canadian and Mexican officials resist.

"People have to be very careful when they open what could really be a Pandora's boxFreeland said Thursday in reference to Trump's threats to reopen negotiations.

(With information from Reuters / By Dave Graham and David Ljunggren)