The New Nafta Agreement

By on 18 December 2020.

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 ($15.38) to $40 ($30.77) for taxes. Canada will also offer duty-free shipments of up to 150 $US ($115.38). Mexico will continue to provide $50 de minimis exemptions and will also offer duty-free shipments of up to $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. Canada will also allow the importer to pay taxes 90 days after the importer enters. 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. [54] 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. [54] 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.

[55] But this change in the general rules of content was not all that the Trump administration has ensured. They also negotiated the requirement that 70 per cent of the steel and aluminum used in vehicle manufacturing be purchased in North America. What is even more worrying is the inclusion for the first time of a content requirement of working value in a U.S. trade agreement. This provision requires that 40 to 45 per cent of automotive content be provided by workers who are paid at least USD 16 per hour. The motivation for such a measure is obvious: to relocate automotive production from Mexico, where assemblers earn about $7.34 an hour and earn about $3.41 an hour. Now, automakers could simply forgo these rules and pay the most preferred national tariff of 2.5%, but at the end of the day, costs will undoubtedly increase and the integrated North American automotive supply chain will inevitably suffer, especially in Mexico. On June 1, 2020, USTR Robert Lighthizer`s office released the uniform rules, which are the final hurdle before the agreement is implemented on July 1, 2020. You`ll find the text of the agreement here: ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/uniform-regulations The Trump administration office proposed the USMCA citing new digital trade measures, strengthening the protection of trade secrets and adapting the rules of origin of the automobile among the benefits of the trade agreement.

[112] The labour provisions are also not included in a subsidiary agreement, but in the main text with controversial mechanisms to enforce the text. Quebec aluminum unions are still concerned about how North American content is determined. They are concerned that there is a loophole for foreign companies to qualify for NAFTA. The Bloc Québécois is making these concerns. National procedures for ratifying the agreement in the United States are governed by the legislation of the Trade Promotion Authority, which is also known as the fast-track authority. On November 30, 2018, the USMCA was signed as planned by the three parties at the G20 summit in Buenos Aires. [58] [59] Disputes over labour rights, steel and aluminum prevented ratification of this version of the agreement. [60] [61] Canadian Deputy Prime Minister Chrystia Freeland, U.S. Trade Representative Robert Lightizer, and Mexican Under-Secretary of State for North America Jesus Seade officially signed a revised agreement on December 10, 2019, ratified by the three countries on March 13, 2020.

In 1994, the United States, Mexico and Canada, together with the North American Free Trade Agreement (NAFTA), created the largest

An open source solution to project recording. Get ARK Now