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U.S., Canada and Mexico All Take Steps Toward Passing USMCA - Washington Report

U.S. Trade Representative Robert Lighthizer sent letters to Congressional leaders on Thursday announcing a procedural step by the Trump Administration allowing it to send the U.S.-Mexico-Canada Agreement (USMCA) to Congress within the next 30 days.

The letter was submitted along with what is known as a draft Statement of Administrative Action (SAA), a procedural formality required by the 2015 Trade Promotion Authority Act. The draft SAA is an outline of the legal changes required to implement the trade agreement into existing U.S. law, which is referred to as the implementing bill.

The letter and draft SAA begin a 30-day clock for House leaders, USTR and the White House to agree on the text of the implementing bill. After 30 days – which would be June 29, 2019 – the White House has made itself legally eligible to submit the final implementing legislation, but it is not required to.

Once it does submit the final implementing bill, the House must vote first, as the trade agreement is considered a tax bill because it alters tariffs. Both chambers must vote straight up or down and will not be able to amend the final submission of the implementing bill.

The letter and draft SAA were sent to House Speaker Nancy Pelosi (D-CA), House Minority Leader Kevin McCarthy (R-CA), Senate Finance Committee Chairman Chuck Grassley (R-IA) and Vice President and President of the Senate Mike Pence.

“The draft SAA is just that—a draft,” the letter said. “It does not in any way prejudice the content of the final implementation package, i.e., the final SAA, final implementing legislation, and the final, binding text. Accordingly, submission of the draft SAA does not limit our ability to find solutions to address concerns Members have raised about enforcement of the labor and environmental provisions of the Agreement and pharmaceutical pricing. We are confident those concerns can be addressed to the satisfaction of the vast majority of Members from both parties through the implementing legislation or otherwise.”

In order for the USMCA to take effect, all three countries must individually ratify the final text. Canadian Foreign Minister Chrystia Freeland presented on Monday what is known as a “ways and means motion” to the House of Commons. The move allows Prime Minister Justin Trudeau to introduce bill C-100, which is the Canadian equivalent to the U.S. implementing bill.

The submission of the letters and draft SAA come on the same day that Vice President Mike Pence and Prime Minister Justin Trudeau met in Ottawa to discuss “how to move forward swiftly to advance this critical deal,” according to Pence. On the same day, Mexican President Andres Manuel Lopez Obrador asked Mexican lawmakers to hold a special session to approve the agreement, known in Mexico as T-MEC.

Canada’s Parliament adjourns at the end of June and federal elections are set for October 21.