International. The United States, Mexico and Canada signed the recently negotiated United States-Mexico-Canada Agreement (USMCA) on the sidelines of the G-20 summit. The USMCA is the successor to the North American Free Trade Agreement (NAFTA); several chapters were updated and new trade chapters were added.
Highlights of the agreement include creating a more level playing field for American workers, including improving rules of origin for cars, trucks, other products, and disciplines on currency manipulation; benefiting U.S. farmers, ranchers, and agribusinesses by modernizing and strengthening food and agriculture trade in North America; support a twenty-first century economy through new protections for U.S. intellectual property and ensure trade opportunities in U.S. services; and new chapters covering digital trade, anti-corruption and good regulatory practices, as well as a chapter dedicated to ensuring that small and medium-sized enterprises benefit from the agreement.
In particular, AHRI considers that the update of the chapter on Technical Barriers to Trade is particularly favourable, as it now contains the appropriate definition of an international standard in accordance with the Agreement on Technical Barriers to Trade (TBT) of the World Trade Organization (WTO).
The three sides agreed to sign the USMCA on Dec. 1 so that Mexican President Enrique Peña Nieto could sign the agreement before leaving office. Each party must then ratify the agreement. The U.S. may pass the USMCA law under the Trade Promotion Authority in early 2019, although press reports indicate that Congress will not vote on the USMCA until later in 2019.
AHRI intends to submit comments to the U.S. International Trade Commission (USITC) for its report on the USMCA on the impact of the agreement on the U.S. economy by December 20.
The USMCA is essentially a NAFTA 2.0, an updated version of the trade agreement from nearly 25 years ago with some major changes to automobiles and new environmental and labor standards. More critically, the renegotiation preserved the trilateral trade pact, after Trump threatened to destroy NAFTA altogether.
But USMCA is not done, and there are still some obstacles to its implementation.
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