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  • Writer's pictureClearFreight

U.S.M.C.A - What’s in the New NAFTA?

Updated: Mar 12, 2021

The North American Free Trade Agreement (NAFTA) was put into place over 25 years ago. An updated version of the original trade agreement, dubbed the United States-Mexico-Canada Agreement (USMCA), was created and informally agreed upon by leaders of the three nations of North America in late 2018. The final version of the USMCA has been signed by Mexican President Enrique Peña Nieto and United States President Donald Trump as of January 29, 2020.

What is Different in the New USMCA?

Analysts have had tepid reactions to the benefits offered by the USMCA, but most agree that this deal will have positive, if only slight, impacts on the US economy. Despite claims of the USMCA’s incredible superiority over the original NAFTA, both agreements are fairly similar; however, there are some key differences between the USMCA and NAFTA:

Changes to Intellectual Property Rights

NAFTA established a policy of 50 years of copyright protection while the USMCA extended that protection to 70 years. Additionally, criminal penalties were added to address trade secret thefts along with cybertheft.

Tech companies like Twitter and Instagram were also given some protections from lawsuits regarding user-posted content on their platforms. The USMCA also protects tech firms from being required to disclose their source code to governments.

Protections for Mexican Laborers

The new USMCA takes steps to enforce Mexican participation labor reforms that should provide workers with safer work environments and the right to organize. Mexico agreed to make legal changes that would protect workers from forced labor and violence while also allowing for the formation of independent unions.

Help for North America’s Automotive Industry

While NAFTA required 62.5 percent of a vehicle’s content to be produced in North America to qualify as a zero tariff product, the USMCA increased that requirement to 75 percent. This change is intended to cut down on imports of components from other continents for vehicles made and assembled in North America.

While it has been ratified in both Mexico and the United States, the USMCA awaits final approval from Canadian leadership to begin in earnest. Contact us to learn more.

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