The United States, Mexico, and Canada Agreement, also known as USMCA, is a trade agreement between the three North American countries. It was signed in November 2018, and it replaced the North American Free Trade Agreement (NAFTA), which had been in effect since 1994.
The goal of USMCA is to encourage free and fair trade between the three countries, while also promoting economic growth and job creation. The agreement covers a wide range of topics, including intellectual property rights, labor standards, and environmental protections.
One of the major changes in USMCA compared to NAFTA is the new rules of origin for automobiles. Under USMCA, in order for a car to be considered “made in North America,” 75% of its content must be from the US, Canada, or Mexico, and 40-45% of its content must be made by workers earning at least $16 an hour.
The agreement also includes new measures to protect intellectual property rights, including stronger enforcement mechanisms for copyright infringement and patent violations. USMCA also includes a new chapter on digital trade, which outlines rules for e-commerce and data privacy.
In addition, USMCA includes a number of provisions related to labor and the environment. The agreement requires Mexico to take steps to improve labor rights and working conditions, including allowing workers to form independent unions. The agreement also includes measures to protect the environment, including provisions related to air and water quality, wildlife protection, and sustainable fishing practices.
Overall, USMCA represents a significant update to NAFTA and is expected to have a positive impact on the North American economy. However, it is important to note that the agreement still needs to be ratified by all three countries before it can go into effect.