For the first time, a trade deal will require the following: This deal uses trade rules to earn higher wages by requiring that 40 to 45 percent of auto content be made by workers who earn at least $16 an hour. Canada ratified the agreement in March and the USMCA entered into force on July 1, 2020. Although NAFTA is officially dead, governments and businesses continue to adapt to the new rules, especially new labor regulations. The coronavirus could also make implementation more difficult as manufacturers adapt to the new guidelines amid the global economic crisis. The new chapter on digital trade contains the strongest digital trade disciplines of any international agreement and provides a solid foundation for developing trade and investment in innovative products and services where the United States has a competitive advantage. This agreement promotes manufacturing and regional economic growth in the United States by requiring that 75% of automotive content be manufactured in North America. To facilitate greater cross-border trade, the United States has entered into an agreement with Mexico and Canada to increase their de minimis shipping values. Canada will increase its de minimis level from $20 CAD to $40 CAD for taxes for the first time in decades. Canada will also offer duty-free shipments up to a maximum of $150 CAD. Mexico will continue to provide $50 duty-free and will also offer duty-free shipments up to the equivalent of US$117. Shipping values up to these levels would be introduced with minimum formal entry procedures, making it easier for more businesses, especially small and medium-sized enterprises, to participate in cross-border trade. The renegotiated agreement contains a chapter on macroeconomic policy and exchange rate issues with new political commitments and transparency in monetary matters.
The chapter will address unfair monetary practices by requiring high-level commitments to refrain from competitive devaluations and target exchange rates, while significantly increasing transparency and providing accountability mechanisms. This approach is unprecedented in the context of a trade agreement and will contribute to strengthening macroeconomic and exchange rate stability. The United States, Mexico and Canada have reached agreement on a modernized, high-quality intellectual property (IP) chapter that ensures strong and effective protection and enforcement of IP rights, which are essential to foster innovation, create economic growth, and support American jobs. The chapter establishes a new framework for an ongoing dialogue on SMEs in which SMEs can participate, including those belonging to different and under-represented groups. The dialogue will allow participants to inform government officials about the implementation and further modernisation of the agreement, ensuring that SMEs continue to benefit from it. In particular, the chapter has the strongest trade secret protection of any previous U.S. trade agreement. It includes all of the following safeguards against misappropriation of trade secrets, including by state-owned enterprises: civil procedures and remedies, criminal procedures and sanctions, prohibitions on impeding the licensing of trade secrets, legal proceedings to prevent the disclosure of trade secrets during litigation, and sanctions for government officials in the event of unauthorized disclosure of trade secrets.
One of President Trump`s main goals in the renegotiations is to ensure that the deal benefits American workers. The United States, Mexico and Canada have agreed on a working chapter that puts professional commitments at the heart of the agreement, makes them fully enforceable and is the strongest provision of a trade agreement. The United States, Mexico and Canada have reached an agreement to modernize the 25-year-old NAFTA into a high-level 21st-century agreement. The new agreement between the United States, Mexico and Canada (USMCA) will support mutually beneficial trade leading to freer markets, fairer trade and robust economic growth in North America. New commitments have been included in the market access chapter to reflect developments in U.S. trade agreements that eliminate non-tariff barriers related to trade in processed goods, import licensing and export licensing. In addition, CBP has created a website to obtain information about the USMCA on CBP.gov, where compliance guidelines, announcements, touchpoints and FAQs are published and maintained. For more information, see www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA. The Agreement between the United States, Mexico and Canada (USMCA) recognizes the fundamental role of small and medium-sized enterprises (SMEs) as drivers of the North American economy.
In fact, Mexico and Canada are the top two export destinations for U.S. SME products. In 2016 (latest data available), 82,000 U.S. small and medium-sized enterprises exported $51.2 billion worth of goods to Canada, and 53,000 U.S. small and medium-sized enterprises exported $76.2 billion worth of goods to Mexico. Now, for the first time in a U.S. trade agreement, the USMCA includes a separate chapter on SMEs, as well as other important provisions that support small and medium-sized enterprises throughout the agreement. To view the full text of the agreement between the United States, Mexico and Canada, click here.
The United States, Mexico and Canada have agreed on the most advanced, comprehensive and modern environmental chapter of all trade agreements. Like the working chapter, the environment chapter places all environmental provisions at the heart of the agreement and makes them enforceable. For the first time in a trade agreement with the United States, the USMCA includes a chapter on good regulatory practices that refers to good governance practices that governments use to promote transparency and accountability in the development and implementation of regulations. Such practices can promote the development of regulatory approaches that are compatible between the parties and reduce or eliminate unnecessarily burdensome, redundant or divergent regulatory requirements. The chapter goes beyond NAFTA and TPP standards and contains provisions that encourage Parties to consider the impact on small businesses when drafting and implementing regulations. The USMCA includes a new chapter on digital trade that includes the strictest provisions of all international agreements and supports small businesses and e-commerce exports over the Internet. Under the leadership of President Donald J. Trump, the United States renegotiated the North American Free Trade Agreement and replaced it with an updated and rebalanced agreement that works much better for North America, the United States, Mexico and Canada (USMCA), which entered into force on July 1, 2020. The USMCA is a mutually beneficial victory for North American workers, farmers, ranchers and businesses. The agreement creates more balanced and reciprocal trade that supports well-paying jobs for Americans and grows the North American economy.
The USMCA increases the de minimis percentage of non-originating inputs allowed in eligible goods from 7% to 10% (within the total limit of 10%, the total weight of the elastomer content must not exceed 7%). For the first time in the U.S. trade agreement, this agreement includes a ban on local data retention requirements in cases where a financial regulator has access to the data it needs to fulfill its regulatory and supervisory mandate. .