Regulatory intelligence for US exporters

USMCA Unlikely to Enter Into Force Before July 1

The many complicated “provisions” for implementing the U.S.-Mexico-Canada Agreement on free trade plausibly means July 1 is the “absolute earliest” date it can “enter into force,” Nicole Bivens Collinson, international trade expert with Sandler, Travis, told a Sports & Fitness Industry Association webinar Jan. 29. President Donald Trump signed USMCA’s enabling legislation into law on Jan. 29 (see 2001290035), saying the agreement “contains critical protections for intellectual property, including trade secrets, digital services and financial services.”

Though there “had been hopes” that Canada would “move pretty quickly” to ratify USMCA, “it’s not clear Canada’s going to be able to do that,” Collinson said. “While we had hoped that we might see February as the ratification date for Canada, it could be later than that.” Even after Canada ratifies, “you can’t implement the agreement until all countries have met their obligations that they’ve committed to,” she said.

Formal inter-country “notification” procedures built into USMCA would follow, Collinson said. “Once that notification goes forward, then you can anticipate that at the soonest it would be 30 days later that the agreement will actually enter into effect.” The last four free trade agreements the U.S. entered into took an average of four years to implement after they were signed, she said. She doubts USMCA will take that long because it’s not a new trade pact that was drawn up from scratch, but a modification of the North American Free Trade Agreement that it replaces, she said.

When USMCA actually takes effect “will depend on whether Canada moves quickly and countries are able to certify that they have met all their obligations and all the uniform rules are put in place,” Collinson said. “I’m thinking, and I’ve heard a few people even in the administration saying this, that it may be January 2021 before the agreement actually goes into effect.”

USMCA’s IP rights protections include “certain safe harbors for businesses that are developing online,” Collinson said. The agreement includes “specific procedures and commitments” for taking down counterfeit products sold on the internet, she said. One key USMCA IP rights provision is that it grants “ex-offico authority for customs officials to seize” counterfeit goods, Collinson said. In the U.S., “we’ve always had that ability,” she said. “But in Canada and Mexico, we did not have the ability to make them seize those goods,” until USMCA, she said.