Details Of The New Usmca Agreement

The renegotiated agreement contains a chapter on macroeconomic policies and exchange rate issues, with new political and transparent monetary commitments. The chapter will address unfair monetary practices by requiring high-level commitments to avoid any devaluation of competition and to target exchange rates, while significantly increasing transparency and providing accountability mechanisms. This approach is unprecedented in the framework of a trade agreement and will contribute to strengthening macroeconomic stability and exchange rates. The terms of the USMCA remain in effect for a period of 16 years during which the parties may decide to review and/or renegotiate the terms or withdraw from the agreement. However, after six years, the duration of the sinking of the USMCA (16 years) may be revised and possibly extended if the parties believe that this would be beneficial. In an appendix to the agreement, Mexico also pledged to pass far-reaching legislative changes to combat forced labour and violence against workers and to allow independent unions and labour tribunals. The International Trade Commission estimates that if the changes are made, they will increase the wages of unionized workers in Mexico and reduce their wage differences with American workers. The “Environment” chapter contains the most comprehensive environmental commitments applicable to a previous U.S. agreement, including obligations to combat trade in wild plants, wood and fish; Strengthen law enforcement networks to curb human trafficking; and address pressing environmental issues, such as air quality and marine waste. To facilitate the strengthening of cross-border trade, the United States has reached an agreement with Mexico and Canada to increase the value of de minimis delivery.

For the first time in decades, Canada will increase its de minimis level from $20 to $40 for taxes. Canada will also offer duty-free shipments of up to 150 $US. Mexico will continue to provide $50 of tax-exempt de minimis and will also provide duty-free shipments up to the equivalent of $117. Shipping rates to this level would be achieved with minimum formal entry procedures, which would allow more businesses, particularly small and medium-sized enterprises, to be part of cross-border trade. The negotiations focused “primarily on car exports, tariffs on steel and aluminum, as well as the milk, egg and poultry markets.” A provision “prevents any party from enacting laws that restrict the cross-border flow of data.” [11] Compared to NAFTA, the USMCA increases environmental and labour standards and encourages domestic production of cars and trucks. [12] The agreement also provides up-to-date intellectual property protection, gives the United States more access to the Canadian milk market, imposes a quota for Canadian and Mexican auto production, and increases the tariff limit for Canadians who purchase U.S. purchasing countries.