After months of negotiation, a new trade agreement has been reached between Canada, the United States, and Mexico. The previous agreement, known as NAFTA (North American Free Trade Agreement), has been updated and renamed the United States-Mexico-Canada Agreement (USMCA).
The USMCA has many similarities to NAFTA, but also includes some significant changes. One of the biggest changes is in the automotive industry. The new agreement will require that 75% of a vehicle`s components be made in North America in order to avoid tariffs, up from the previous 62.5% requirement. Additionally, a larger percentage of the vehicle`s components must be made by workers earning a minimum of $16 per hour.
The USMCA also includes new provisions on intellectual property, digital trade, and e-commerce. The agreement strengthens protections for patents and trademarks, and mandates that member countries establish criminal and civil penalties for the theft of trade secrets.
Another notable change is in regards to dairy products. Canada has agreed to give the United States greater access to its dairy market, by eliminating a pricing system that was seen as unfair to American farmers. In exchange, the United States agreed to preserve a dispute settlement process that Canada had been seeking to keep.
The USMCA is expected to have an impact on a wide range of industries and businesses, including agriculture, energy, and manufacturing. It is also expected to create new opportunities for small and medium-sized businesses looking to expand their exports.
Overall, the USMCA represents a significant update to a decades-old trade agreement. While there are still questions about how the agreement will be implemented and enforced, it is seen as a positive step towards strengthening trade relationships between the United States, Canada, and Mexico.