Canada Us and Mexico Trade Agreement

In September 2018, the United States, Mexico, and Canada reached an agreement to update the North American Free Trade Agreement (NAFTA), which was first implemented in 1994. The new agreement, called the United States-Mexico-Canada Agreement (USMCA), was signed by the leaders of the three countries on November 30, 2018, and is currently awaiting ratification by their respective legislative bodies.

The USMCA includes provisions that address a broad range of issues related to trade between the three countries, including rules governing the auto industry, intellectual property protections, and measures aimed at increasing access to the Canadian dairy market. The agreement also includes a number of updates and modernizations to the original NAFTA, which was widely criticized by President Trump and others for its alleged negative impact on the American economy.

One of the most significant changes included in the USMCA is a new requirement that a significant portion of the parts used to manufacture cars sold in the United States, Mexico, and Canada must come from within the region. Specifically, the agreement mandates that 75 percent of the parts used to make a car must be sourced from within North America in order for the car to qualify for duty-free treatment under the agreement.

The USMCA also includes new provisions aimed at increasing access to the Canadian dairy market, which has long been protected by high tariffs and other trade barriers. Under the terms of the agreement, the United States will be able to export more dairy products to Canada, and Canadian processors will be able to manufacture more dairy products using imported ingredients.

In addition to these specific provisions, the USMCA also includes a number of updates and modernizations to the original NAFTA. For example, the agreement includes new protections for digital trade, including provisions requiring the free flow of data across borders and limiting the ability of governments to require companies to store data locally. The agreement also includes new protections for workers and the environment, including new labor and environmental standards that all three countries have committed to uphold.

Overall, the United States-Mexico-Canada Agreement represents a significant update and modernization of the original NAFTA. While the agreement has yet to be ratified by the legislative bodies of the three countries, it is widely expected to receive approval in all three countries, which could help to further boost trade and economic growth throughout the North American region.