16 Jan 2020

U.S. Senate poised to pass new North American trade deal

FILE PHOTO: Flags of the U.S., Canada and Mexico fly next to each other in Detroit, Michigan, U.S. August 29, 2018. REUTERS/Rebecca Cook

WASHINGTON (Reuters) – The U.S. Senate was poised to approve a new North American trade deal on Thursday, clearing the way for a revamp of the 26-year-old NAFTA that includes tougher labor and automotive content rules but leaves $1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged.

The Senate easily passed a procedural measure, paving the way for a vote on the implementing legislation for the U.S.-Mexico-Canada Agreement. That is expected to pass with bipartisan support later Thursday, sending the measure to President Donald Trump for signing into law.

It comes a day after Trump signed a Phase 1 trade deal with China, and as the Senate takes formal steps to consider his removal from office in an impeachment trial due to begin next week.

Canada still needs to approve the trade deal before it can take effect and replace the 26-year-old North American Free Trade Agreement. Trump has blamed NAFTA for the loss of thousands of American factory jobs to low-wage Mexico.

Canada’s parliament does not return to session until Jan. 27, so the scheduling of a vote there remains unclear. But USMCA is expected to see little resistance in Canada, as Conservatives have said they would back the deal negotiated earlier by Prime Minister Justin Trudeau’s Liberal-dominated government.

“Today the Senate will send this landmark agreement to the president’s desk. A big bipartisan win,” Senate Republican Leader Mitch McConnell said in Senate floor remarks.

Only a handful of U.S. senators have voiced opposition to the trade deal, passed by the House of Representatives on Dec. 19 after Democrats insisted on changes to improve enforcement of new labor rights.

Writing by David Lawder; additional reporting by Andrea Shalal; Editing by Alistair Bell and Rosalba O’Brien

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