Commercial Agreements, US-Mexico Trade & Agreements

USMCA Day one is here and it’s the dawn of a new era in trade and starting today, this is the timeline for the coming years

 

Below are some opportunities in full compliance of the new trade deal:

AUTOS

  • Requires that at least 75% of USA cars be produced in the region.
  • Requires that at least 35% of them be produced by workers making $16 an hour or more to pass through the countries duty-free.

United States-Mexico-Canada Agreement (2018) Chapter 4: Rules of Origin

DISPUTES

  • Keeps NAFTA’s dispute-settlement provisions and incorporates them into Chapter 10.
  • Restricts NAFTA’s investor-state dispute resolution provisions between the U.S. and Mexico and eliminates them between the U.S. and Canada.

United States-Mexico-Canada Agreement (2018) Chapter 10: Trade Remedies
United States-Mexico-Canada Agreement (2018) Chapter 31: Dispute Settlement

FTAS WITH NON-MARKET ECONOMIES

  • Requires that any member who plans to launch trade negotiations with a non-market economy give the other two at least 3 months’ notice prior to starting the negotiations.
  • Allows members to potentially terminate the agreement if a member decides to enter into an FTA with a non-market economy.
  • In this case, it allows the remaining members to replace the USMCA with a bilateral agreement between them.

United States-Mexico-Canada Agreement (2018) Chapter 32: Exceptions and General Provisions

DAIRY

  • Allows U.S. dairy farmers to export the equivalent of 3.6% of Canada’s dairy market into Canada.
  • Eliminates Canada’s Class 6 and Class 7 milk categories and associated pricing schedules for skim milk, skim milk proteins, and other components and ultrafiltered milk.

United States-Mexico-Canada Agreement (2018) Chapter 3: Agriculture.

CURRENCY

The new deal includes a new currency chapter that commits the three countries to:

  • Maintain market-determined exchange rates.
  • Refrain from competitive devaluations of their currencies.
  • Strengthen the conditions for macroeconomic and exchange rate stability.

United States-Mexico-Canada Agreement (2018) Chapter 33: Macroeconomic Policies and Exchange Rate Matters

DIGITAL TRADE

  • Prohibits customs duties from being applied to electronically distributed products such as e-books, videos, music, software, and games.
  • Allows data to be transferred cross-border and reduces the limits on where data can be stored and processed.
  • Places stronger enforceable consumer protections on the digital market.

United States-Mexico-Canada Agreement (2018) Chapter 19: Digital Trade

SUNSET CLAUSE

  • Includes a 16-year expiration date.
  • Requires the U.S., Mexico, and Canada to meet and review the deal every six years, when it can be extended for another 16 years.

United States-Mexico-Canada Agreement (2018) Chapter 34: Final Provisions

 

Don’t miss this opportunity to get goods to market with confidence by seamlessly complying with the USMCA’s new trade agreement rules and documentation requirements from day one.


 

Source: USMCA infographic by the Mexico Institute https://www.wilsoncenter.org/article/infographic-the-usmca
Cover photo: Shutterstock