Representatives from the United States, Canada and Mexico recently met to sign a new trade deal that will affect many woodworking companies and suppliers.

The three countries signed the United State-Mexico-Canada Agreement (USMCA) in Mexico City. The new agreement will replace the North American Free Trade Agreement that was introduced in 1994. President Trump has sought to replace NAFTA since he took office.

It was also a rare example of bipartisan cooperation in an increasingly divided Washington.

The NAFTA agreement has benefitted many companies selling equipment and tooling across the borders of the three countries. Furniture and cabinet exporters have also benefitted.

The Wood Machinery Manufacturers Association has supported USMCA for several years, believing that it would provide WMMA member companies with an opportunity to benefit from open trade between the three countries.

The agreement is expected to be approved in Ottawa and Mexico City, but final approval in the U.S. Senate may be delayed.

USMCA was signed in October 2018, but U.S. House Democrats wanted provisions on worker rights and enforcement of labor rules spelled out in the new agreement. The White House had to provide Congress with a final text. Other areas of negotiation included Mexican steel and aluminum product definitions and liability for tech companies.

In its earlier position paper, WMMA said that its member companies sell most of their products to customers in North America. These companies benefit from open trade between the U.S., Canada and Mexico. It was also believed that a delay in approving USMCA would negatively affect the trade negotiations with China and Europe.

Patrick Rita of Orion Advocates in Washington and WMMA representative, said that legislation embodying the details of the agreement is being finalized by the administration and is expected to be submitted to Congress early next week for a House vote.

Passage in the House is expected next week (assuming legislation is submitted in a timely fashion), but the Senate timeline is less certain, Rita said. Senate Majority Leader Mitch McConnell indicated that the Senate would take up USMCA implementing legislation following the Senate’s impeachment trial, which is likely to occur in January.

During impeachment proceedings in the Senate, legislative business is suspended and the expected duration of a Senate trial is unclear at this point. The bottom line, however, is that Congressional approval of the USMCA agreement is imminent, Rita said.

 

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