The United States, Mexico and Canada have reached an agreement to modernize the 25-year-old NAFTA into a high-level 21st-century agreement. The new agreement between the United States, Mexico and Canada (USMCA) will support mutually beneficial trade, leading to freer markets, fairer trade and robust economic growth in North America. The Agreement between the United States of America, the United Mexican States and Canada[1], commonly known by its American-English title United States-Mexico-Canada Agreement (USMCA), is a free trade agreement between Canada, Mexico and the United States as the successor to the North American Free Trade Agreement (NAFTA). [2] [3] [4] The agreement has been referred to as „NAFTA 2.0”,[5][6][7] or „New NAFTA”[8][9] because many provisions have been incorporated into NAFTA and its amendments have been considered largely progressive. On 1 July 2020, the USMCA entered into force in all Member States. But there is something about this fusion of NAFTA and globalization. The agreement „initiated a new generation of trade agreements in the Western Hemisphere and other parts of the world,” the CRS writes, so „NAFTA” has naturally become an abbreviation of 20 years of broad diplomatic, political and trade consensus that free trade is generally a good thing. In addition, there is a provision that the agreement itself must be reviewed by the three countries every six years, with a 16-year expiration clause. The agreement can be extended for a further 16 years as part of the semi-annual reviews.

[51] The introduction of the sunset clause gives more control over the future of the USMCA in the hands of national governments. However, there is concern that this could lead to greater uncertainty. Industries such as the automotive industry require significant investments in cross-border supply chains. [52] Given the predominance of the U.S. CONSUMER MARKET, this will likely put pressure on companies to locate more production in the U.S., resulting in a greater likelihood of higher production costs for these vehicles. [53] The United States, Mexico and Canada are parties to the Agreement between the United States, Mexico and Canada (USMCA) (www.trade.gov/usmca), which entered into force on July 1, 2020 and replaces the North American Free Trade Agreement (NAFTA). Eligible goods and services that did not have tariffs under NAFTA remain at zero under the USMCA. For more information on tariffs, see the Trade Barriers section of this guide and/or the FTA Tariff Tool and FTA Resource Toolkit in our FTA Help Center. NAFTA provides for three main dispute settlement mechanisms. Chapter 20 is the resolution mechanism from one country to another. It is often considered the least controversial of the three mechanisms, and it has been maintained in its original NAFTA form in the USMCA. Such cases would include complaints between USMCA member states that a provision of the agreement has been violated.

[48] In Chapter 19 disputes, the justification of anti-dumping or countervailing duties is regulated. Without Chapter 19, the legal recourse for the management of these policies would be through the national legal system. Chapter 19 states that a USMCA committee will hear the case and act as an international trade tribunal to resolve the dispute. [48] The Trump administration has attempted to remove Chapter 19 of the new TEXT of the USMCA, although it has already been in place in the agreement. For the first time, a trade deal will require the following: Led by the auto industry, the largest export category, Mexican manufacturers maintain a $58.8 billion trade surplus with the United States. They have also contributed to the growth of a small, educated middle class: Mexico had about nine engineering graduates per 10,000 people in 2015, compared to seven in the United States. During the 2016 presidential campaign, Donald Trump promised to renegotiate NAFTA, which he called „the worst trade deal ever.” As president, he did. The result is the USMCA, which Trump signed in January and touted as one of his flagship achievements in his State of the Union address. In 1994, the United States, Mexico and Canada created the world`s largest free trade region with the North American Free Trade Agreement (NAFTA), which generated economic growth and helped raise the standard of living of people in all three member countries. By strengthening trade and investment rules and procedures, this agreement has proven to be a solid foundation for building Canada`s prosperity and has provided a valuable example of the benefits of trade liberalization for the rest of the world. The new agreement between Canada, the United States and Mexico will serve to strengthen Canada`s strong economic ties with the United States and Mexico. According to U.S.

Trade Representative Robert Lighthizer, the Trump administration`s goal was to stop the „hemorrhage” of trade deficits, plant closures and job losses by pushing for stricter labor and environmental protection measures in Mexico and abolishing the „Chapter 19 dispute settlement mechanism” – a Canadian favorite and a thorn in the side of the U.S. timber industry. Describes the trade agreements in which this country is involved. Provides resources for U.S. companies to obtain information on the use of these agreements. Does that mean Canada and the United States? Are the winners of NAFTA and Mexico the losers? Perhaps, but if so, why did Trump launch his campaign in June 2015 with the words „When are we beating Mexico at the border? They make fun of us, of our stupidity. .