Here’s what it will take to get NAFTA 2.0 in place before the next election
When it came to NAFTA negotiations, it was the U.S. and Mexico pressed up against a ticking clock.
But now that a deal has been reached, will that situation be reversed?
News of an agreement in principle came at the 11th hour on Sunday night as the clock ticked down to the deadline set in order to give outgoing Mexican president Enrique Peña Nieto time to sign the deal before handing over power to his successor on Dec. 1, and to give the U.S. Congress the 60 days required to study the bill before the Trump administration can sign it.
The Canadian government, on the other hand, said as late as last week it wasn’t working around any deadline.
With a deal in hand and a tentative timeline for signing it, the question now turns to when it will actually come into force and whether that can happen before the federal election on Oct. 21, 2019.
Signing a trade deal does not bring it into force.
Member countries need to ratify the deal in their respective legislative bodies. That means passing legislation and making regulatory changes to bring Canadian law into compliance with the terms of the agreement and make the agreement legally binding. The process can take months.
So how long might it take to officially get NAFTA 2.0 in place?
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The short answer is that legislation likely cannot be tabled before mid-February 2019 but could still be approved before the House of Commons rises for the last time in June 2019, though it would likely be a tight fit.
The long answer is, it comes down to a lot of specifics that might not even matter if the government forgoes the normal process because of the tight timeline.
How recent agreements stack up
For comparison, let’s look at the two other major trade deals signed by Canada over the last two years.
The Comprehensive Economic and Trade Agreement (CETA), which allows for free trade between Canada and the European Union, was signed on Oct. 30, 2016, after the text had been presented in the House of Commons on Oct. 3, 2016, to allow for the 21 days of discussion required by law.
On Oct. 31, 2016, the bill to implement the agreement was tabled in the House of Commons.
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After going through the legislative process in both the House of Commons and the Senate, it received royal assent on May 16, 2017.
It entered into force provisionally — meaning roughly 98 per cent of it went into effect — on Sept. 21, 2017.
However, while Canada ratified the treaty, several European member states have not, meaning those remaining provisions will not come into effect until the agreement is fully ratified by all European states.
A similar process is underway right now for the Comprehensive and Progressive Trans Pacific Partnership (CPTPP).
Signed on March 8, 2018, the text of the agreement was tabled in the House of Commons on May 22.
The bill to implement the agreement was tabled on June 14, and after passing through study by committee on Sept. 26, it could be in the Senate before this Christmas.
So when might NAFTA 2.0 be done?
According to Global Affairs Canada, the government needs to issue what’s called an order in council to authorize a person — usually either the prime minister, the foreign affairs minister, or both — to sign the agreement on behalf of the Government of Canada.
The order authorizing the signing of CPTPP came on March 2, 2018: six days before the deal was signed on March 8.
The order authorizing the signing of CETA came on Oct. 26, 2016: four days before the deal was signed on Oct. 30.
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Since the United States requires the deal to be presented to Congress 60 days before it can be signed, it would need to be presented by Oct. 2 in order to be signed by Nov. 30.
With that date in mind, history suggests an order authorizing the signing could come the week of Nov. 19 or Nov. 26.
Once the deal is signed, the government must table the text of the deal in the House of Commons to give MPs 21 sitting days of discussion.
Only after those 21 sitting days have passed can the government table implementation legislation.
With that in mind, look for the text to be tabled no more than a couple of days after it is signed in order to take advantage of the time remaining before the House of Commons rises for winter break from Dec. 14 until Jan. 28, 2019.
If the text of the deal is tabled, for example, on Dec. 3, the first Monday after the deal is slated to be signed, the government would be able to present implementation legislation by Feb. 20, 2019, accounting for the days the House of Commons will not be sitting during the winter break as well as the spring break from Feb. 11 to 15, 2019.
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From there, it would be a legislative crunch to get that bill through both chambers of Parliament by late June 2019.
While the House of Commons rises for the last time under this government on June 21, 2019, at the latest, the Senate generally sits roughly a week longer.
That means a bill implementing NAFTA 2.0 could have until the end of June to receive royal assent and be ratified domestically in time for the election.
It took roughly seven months (six, not including winter break) to get the CETA implementation bill through Parliament.
On the other hand, the CPTPP legislation is almost through the House of Commons after less than a month of full debate since MPs returned on Sept. 17, 2018.
It’s worth noting though that while the deal could be provisionally applied while Mexico and the U.S. go through their version of that process, it cannot be fully applied until both the American and Mexican Congress ratify it for themselves.
The question now for NAFTA seems to be just how hard the government will be willing to push to get a NAFTA bill done — and whether it will have to sacrifice other bills to carve out some room in the legislative agenda.
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If worse comes to worst, the rules do state the foreign affairs minister can skip the treaty tabling process “where a treaty’s ratification is urgently required” with just a letter from the prime minister allowing the treaty to be ratified via a memorandum by cabinet.
But where would the fun be in that?
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