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- On December 19, 2020
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“One of the major challenges of assessing NAFTA is to separate the effects of the agreement from other factors. U.S. trade with Mexico and Canada intensified before NAFTA and would probably have continued without an agreement,” he said. On Thursday, for the first time, the U.S. stock index crossed the 3,300 mark for the first time, boosted by two commercial transactions, strong retail sales and positive profits from Morgan Stanley. In a joint statement last month, the Sierra Club, the League of Conservation Voters and the Natural Resources Defense Council urged its members to oppose the USMCA. They said the new trade deal did not go far enough and would “promote further pollution and job destocking, provide subsidies to notorious polluters, and extend Trump`s polluting legacy by several years.” A new addition to the USMCA is the inclusion of Chapter 33, which covers macroeconomic policies and exchange rate issues. This is considered important because it could set a precedent for future trade agreements.  Chapter 33 sets out requirements for currency and macroeconomic transparency that, in the event of a breach, would be grounds for litigation under Chapter 20.
 The United States, Canada and Mexico currently meet all of these transparency requirements in addition to substantive policy requirements that comply with the international Monetary Fund`s articles.  For the first time, the new agreement also provides that 40 to 45 per cent of parts of a non-tariff vehicle must come from a so-called high-wage plant. These plants must pay at least $16 per hour in average wages for production workers. That`s about three times the average wage at a Mexican plant right now, and government officials hope that this provision will force automakers to buy more supplies from Canada or the United States, or raise wages in Mexico. The agreement extends other intellectual property rights, such as. B extending copyright protection for 50 years in NAFTA to 70 years. It also includes new criminal penalties for the theft of trade secrets, including cyber theft. On June 1, 2020, the USTR Office issued the uniform rules which are the last hurdle before the implementation of the agreement on July 1, 2020. Trump made the renegotiation of NAFTA a centerpiece of his 2016 election campaign, called it the “worst trade deal ever” and blamed him for the loss of thousands of low-wage U.S.
factory jobs in Mexico. The Canada-Mexico-U.S. trade agreement will officially enter into force on July 1. U.S. Trade Representative Robert Lighthizer said the agreement would establish “the new gold standard” for all future trade agreements, with strong and enforceable levels of work and environment, numerical provisions and rules against subsidies and currency manipulations that distort the market. With a renegotiated trade pact with Mexico and Canada and the signing of a first trade agreement with China aimed at ending a long and bitter trade war, Trump can say he has kept his promise to act hard against trade and eliminate the “bad deals” of his predecessors. On the way to the 2020 presidential campaign, Democratic hopefuls have expressed some differences over the new pact. During Tuesday night`s debate, Sanders stressed that “we could do much better than a Trump-led trade deal.” Canada ratified the agreement in March and the USMCA came into force on July 1, 2020. Although NAFTA is officially dead, governments and businesses are still adapting to the new rules, especially the new labour rules. Coronavirus can also complicate implementation as manufacturers adapt to new guidelines in the midst of a global economic crisis.
On April 24, 2020, U.S. Trade Representative Robert Lighthizer formally announced to Congress that the new trade agreement is expected to come into effect on July 1, 2020, and he also informed Canada and Mexico.   To see the full text of the agreement between the United States, Mexico and Canada, click here.