What Is Us Mexico Canada Agreement

Canada ratified the agreement in March and the USMCA entered into force on July 1, 2020. Although NAFTA is officially dead, governments and businesses continue to adapt to the new rules, especially new labor regulations. The coronavirus could also make implementation more difficult as manufacturers adapt to the new guidelines amid a global economic crisis. The Agreement between the United States of America, the United Mexican States and Canada[1], commonly referred to as the 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 were included in NAFTA and its amendments were considered largely progressive. The 1. In July 2020, the USMCA entered into force in all Member States. The Trump administration`s Office of the U.S. Trade Representative has proposed the USMCA, listing new digital trade measures, strengthening trade secret protections and adjusting rules of origin for motor vehicles as some of the benefits of the trade deal. [112] NAFTA required automakers to produce 62.5% of a vehicle`s contents in North America in order to qualify for zero tariffs. The new agreement raises this threshold to 75% over time. This is aimed at forcing automakers to buy fewer parts for an “Assembled in Mexico” car in Germany, Japan, South Korea or China. The pact also requires that 70% of a vehicle`s steel and aluminum come from North America, with steel both melted and cast on the continent.

The agreement between the United States, Mexico and Canada is based on the North American Free Trade Agreement (NAFTA), which entered into force on January 1, 1994. On December 12, 2019, the Mexican Senate adopted the revised treaty by 107 votes to 1. [89] On April 3, 2020, Mexico announced that it was ready to implement the agreement and join Canada,[15] although it requested that its automotive industry have additional time to comply with the agreement. [90] Before going into details, here is some basic information. The World Trade Organization (WTO) is the multilateral organization that established the basic rules of trade between its 164 member states, including the United States. .