Our international trade policy team recently published an analysis on the modernized North American Free Trade Agreement (NAFTA), known as the US-Mexico-Canada Agreement (USMCA). Below is a snapshot of the analysis.
On September 30, 2018, the US, Mexico and Canada announced the successful conclusion of talks to replace the North American Free Trade Agreement (NAFTA). The US-Mexico-Canada Agreement (USMCA) contains a number of chapters not included in the original deal, including sections on digital commerce, currency policies and state-owned enterprises (SOEs). Other standard chapters – such as Intellectual Property, Rules of Origin, and Sanitary and Phytosanitary (SPS) Measures – have also been updated to reflect the 21st century economy. Companies operating in North America must now closely examine the deal to determine how it could impact their supply chains.
What Is New?
The Office of the US Trade Representative (USTR), which led negotiations on behalf of the Trump Administration, has characterized the new agreement as a “plus-ed up” version of the Trans-Pacific Partnership, adding this deal will serve as the “model” for future trade agreements negotiated by the US.
Companies operating in North America must closely examine USMCA to ensure they understand the impact of its changes on trade across the continent, which could range from domestic content requirements to legal recourses available for disputes to customs procedures and much more. These changes include the following:
- Digital Commerce
- Rules of Origin
- Addressing China’s Trade Practices and Policies
- Customs Procedures
- Investor-State Dispute Settlement (ISDS)
- Oil and Gas Industry
- Pharmaceutical Industry
- Future Review
Download the full document here.