The Wall Street Journal (WSJ) recently covered the trade agreement between the United States, Mexico, and Canada. The new trade deal is known as the United States-Mexico-Canada Agreement (USMCA). This agreement replaces the North American Free Trade Agreement (NAFTA) that has been in place since 1994.
The USMCA has been negotiated for over a year and was signed in November 2018. The agreement aims to modernize and improve upon NAFTA, with a focus on increasing market access for American goods and services. Some of the key changes in the agreement include new intellectual property protections, new rules for digital trade, and a new chapter on labor rights and environmental protections.
One of the most significant changes in the agreement is the increase in the minimum percentage of a car’s parts that must be made in North America in order to qualify for duty-free treatment. Under NAFTA, the threshold was set at 62.5%. In the USMCA, the threshold has been raised to 75%. This change is aimed at encouraging more manufacturing in the US and North America overall.
Another key change in the agreement is the elimination of the dispute settlement mechanism known as Chapter 11. This mechanism allowed foreign investors to sue governments over policies that affect their investments. The USMCA replaces this mechanism with a new dispute settlement mechanism known as the Investor-State Dispute Settlement (ISDS) Mechanism. This new mechanism aims to provide a more balanced approach to resolving disputes between investors and governments.
The USMCA has been praised by the Trump administration as a significant achievement for American workers and businesses. However, some analysts have raised concerns about the potential impact of the agreement on certain industries, such as the auto industry. Others have expressed concerns about the uncertainty that has been created by the renegotiation of NAFTA.
Overall, the USMCA represents an important step forward in the relationship between the United States, Mexico, and Canada. The agreement is expected to have a significant impact on trade between the three countries and on the global economy as a whole. As the trade agreement moves forward, it will be important to monitor its impact on key industries and to continue to evaluate its effectiveness in achieving its goals.
Recent Comments