OTTAWA — Canadians are inspecting the fresh U.S. political landscape following midterm election results that many believe have added fresh trade-related uncertainty, especially surrounding the recently sign United States -Mexico-Canada Agreement.
Experts says the Democrats' majority victory Tuesday in the U.S. House of Representatives means the ratification of the recently struck USMCA, will likely have to wait well into 2019.
Trump and his counterparts are scheduled to sign the deal on the sidelines of the Nov. 30-Dec. 1 Group of 20 summit in Buenos Aires, according to Bloomberg.
Trade expert Lawrence Herman says he expects the pact to eventually gain approval of the other branches of U.S. government — but he warns there's a risk the agreement-in-principle could crumble, especially if Democrats decide the deal's passage isn't politically advantageous for their party.
Either way, Herman says Canadian businesses now face new unknowns as they try to make export and investment decisions.
Unifor president Jerry Dias, whose union represents auto workers, says now that the midterms are over Canadian MPs from all parties must apply more pressure to secure the removal of unjust tariffs he argues were imposed to score political points with the Republican base.
Edward Alden, a senior fellow at the Council on Foreign Relations, said that while Democrats will likely be skeptical of some of the provisions, including on patents, labour rights and environmental protections, they won't want to kill the deal.
Trump can withdraw from NAFTA, in place until the new deal kicks in, to put pressure on U.S. lawmakers to pass his new agreement by setting up a six-month period before the U.S. is no longer party to the existing agreement.
"I have no doubt Trump will pull the plug on NAFTA if he can't get the USMCA through Congress," Alden said.
Democrats could leverage their vote on Trump's trade deal and push for an infrastructure package that Trump has long promised and would align with their own priorities.
"I don't know how much, if any, traction that would get but that's something that would be attractive for many folks," Scott Paul, president of the Alliance for American Manufacturing, said.
Canada will also scrutinize the midterm results for other cross-border impacts, including the fate of the Trump administration's painful tariffs on steel and aluminum imports from north of the border.
The Canadian Press and Bloomberg contributed to this report.