Ever since Donald Trump became the president of the United States, he's been wanting to renegotiate the North American Free Trade Agreement (NAFTA). So, after years of talk, it's finally happened.
On July 1, 2020, NAFTA was replaced by USMCA.
"Much of the new United States-Mexico-Canada Agreement simply updates the 25-year-old North American Free Trade Agreement, with new laws on intellectual property protection, the internet, investment, state-owned enterprises and currency."
What does this mean? Here are the highlights
- Increased access for U.S. dairy and poultry farmers to the Canadian market.
- A requirement that automobiles have at least 75% of their components manufactured in North America.
- A requirement that at least 40% of automobile parts be manufactured by workers making at least $16 an hour.
- An increase in the de minimis rule for exports to Canada (up to $150 CAD) and Mexico ($117 USD) to allow goods up to that value to enter duty free. This is intended to boost small e-commerce orders to those countries. The U.S. de minimis amount is unchanged at $800, although the agreement allows the U.S. to match the de minimis amounts of the other two countries, if it desires.
- An extension of the copyright on intellectual property to 70 years beyond the life of the author, an increase of 20 years from NAFTA.
- An expansion of intellectual property rights enforcement to digital goods and an elimination of duties on those items like music and ebooks.
- A built-in expiration date. The USMCA is set to expire in 16 years if it is not expressly renewed. To facilitate that potential renewal, the agreement requires the three countries to review the agreement every six years.
Text taken from Shipping Solutions and The New York Times. To read the full articles, click below.