The United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement to drive mutually beneficial trade among the three countries. Thomas Insights answers some key questions about the agreement.
Why is a North American trade deal so important? Mexico and Canada are the United States’ biggest export market, supporting 12 million American jobs and 40% of export growth. The USMCA will secure tariff-free trade in North America.
How will it help businesses mitigate risk? In a disruptive environment, businesses require stability. The USMCA offers the clarity and consistency they need to act on long-term business plans.
How will the U.S. auto industry benefit? The USMCA specifies that 75% of automobile components must be manufactured within the participating nations to qualify for zero tariffs, while 40% to 45% of parts must be manufactured by employees who earn more than $16 per hour.
How will the USMCA support U.S. agriculture? Almost one-third of U.S. agricultural exports go to Canada and Mexico. With the trade war in China impacting agricultural exports, U.S. farmers will depend on the USMCA to improve their access to the North American market.
Will the USMCA drive economic growth? The USMCA will drive $34 billion in investments in U.S. auto plants, $23 billion in auto parts sales, and create 76,000 new industry jobs in the next five years, predicts The Office of the U.S. Trade Representative.
Jan 23, 2017 President Trump announces plans to renegotiate NAFTA.
May 18, 2018 Negotiations for a new agreement begin.
Aug 27, 2018 Mexico and the U.S. reach a deal on NAFTA 2.0.
Sept 30, 2018 NAFTA is renamed USMCA, and an initial draft of the agreement is released.
Nov 30, 2018 The final draft of the USMCA is released, totaling 2,325 pages. President Trump, Canadian Prime Minister Justin Trudeau, and former President of Mexico Enrique Peña Nieto sign the deal.
Jun 19, 2019 Mexico becomes the first nation to ratify the USMCA trade deal.
Dec 10, 2019 The "Protocol of Amendments to the Agreement Between the United States of America, the United Mexican States, and Canada", which includes 27 pages of amendments, is signed.
Dec 19, 2019 The agreement passes the U.S. House with a vote of 385 to 41.
Jan 16, 2020 The U.S. Senate approves the agreement.
Jan 29, 2020 President Trump officially ratifies the agreement.
Mar 13, 2020 Canada becomes the final nation to ratify the agreement.
July 1, 2020 USMCA goes into effect.