The timing could not be better for the United States Mexico, Canada, America Trade Agreement to go into effect. During a time of economic uncertainties and challenges we need all the help we can get to put America first, helping workers to good paying jobs, as well as strengthen our manufacturing and exports
President Trump ran for election promising to renegotiate outdated and unfair trade agreements. Shortly after taking the oath of office as our nation's 45th president, he set out to do just that.
Key Milestones in Passage of USMCA:
Nov. 30, 2018 –Initially Signing by the United States, Mexico & Canada
Dec. 10, 2019 – Final Agreement Signed by the United States, Mexico & Canada
Dec. 19, 2019 – U.S. House of Representatives Passes USMCA 385 to 41
Jan. 16, 2020 – U.S. Senate Passes USMCA 89 to 10
Jan. 29, 2020 – United States Ratifies USMCA
March 13, 2020 – Canada Ratifies USMCA
April 3, 2020 – Mexico Ratifies USMCA
July 1, 2020 – USMCA Entry Info Force
The United States, Mexico, and Canada have reached an agreement to modernize the 25-year-old NAFTA into a 21st century, high-standard agreement. The new United States-Mexico-Canada Agreement (USMCA) will support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.
Here are the key components of the USMCA:
Intellectual Property: The United States, Mexico, and Canada have reached an agreement on a modernized, high-standard Intellectual Property (IP) chapter that provides strong and effective protection and enforcement of IP rights critical to driving innovation, creating economic growth, and supporting American jobs.
Digital Trade: The new Digital Trade chapter contains the strongest disciplines on digital trade of any international agreement, providing a firm foundation for the expansion of trade and investment in the innovative products and services where the U.S. has a competitive advantage.
De minimis: To facilitate greater cross-border trade, the United States has reached an agreement with Mexico and Canada to raise their de minimis shipment value levels. Canada will raise its de minimis level for the first time in decades, from C$20 to C$40 for taxes. Canada will also provide for duty free shipments up to C$150. Mexico will continue to provide USD $50 tax free de minimis and also provide duty free shipments up to the equivalent level of USD $117. Shipment values up to these levels would enter with minimal formal entry procedures, making it easier for more businesses, especially small- and medium-sized ones, to be a part of cross-border trade.
Increasing the de minimis level with key trading partners like Mexico and Canada is a significant outcome for United States small- and medium-sized enterprises (SMEs). These SMEs often lack resources to pay customs duties and taxes, and bear the increased compliance costs that low, trade-restrictive de minimis levels place on lower-value shipments, which SMEs often have due to their smaller trade volumes.
New traders, just entering Mexico’s and Canada’s markets, will also benefit from lower costs to reach consumers. United States express delivery carriers, who carry many low-value shipments for these traders, also stand to benefit through lower costs and improved efficiency.
Financial Services: U.S. financial services firms provide services critical to every sector of the economy, including small- and medium-sized businesses. The United States exported about $115 billion in financial services in 2016, generating around a $41 billion surplus in trade in financial services.
The updated Financial Services chapter includes commitments to liberalize financial services markets and facilitate a level playing field for U.S. financial institutions, investors and investments in financial institutions, and cross-border trade in financial services. The chapter also preserves the discretion of financial regulators to ensure financial stability.
Environment: The United States, Mexico, and Canada have agreed to the most advanced, most comprehensive, highest-standard chapter on the Environment of any trade agreement. Like the Labor chapter, the Environment chapter brings all environmental provisions into the core of the agreement and makes them enforceable.
Agriculture: While agriculture has generally performed well under NAFTA, important improvements in the agreement will enable food and agriculture to trade more fairly, and to expand exports of American agricultural products.
Small and Medium Business: The United States, Mexico, and Canada Agreement (USMCA) recognizes the fundamental role of small and medium-sized enterprises (SMEs) as engines of the North American economy. In fact, Mexico and Canada are the top two export destinations for U.S. SME goods. In 2016 (latest data available), 82,000 U.S. small and medium sized businesses exported $51.2 billion in goods to Canada, and 53,000 U.S. small and medium businesses exported $76.2 billion in goods to Mexico. Now, for the first time in a U.S. trade agreement, the USMCA includes a dedicated chapter on SMEs, as well as other key provisions supporting small and medium-sized businesses throughout the agreement.
Labor: The United States, Mexico, and Canada have agreed to a labor chapter in the USMCA that includes the strongest, most advanced, and most comprehensive set of labor obligations of any U.S. trade agreement. One of President Trump’s principal objectives of this renegotiation was to ensure that the new agreement benefits American workers.
The president summed up the USMCA best when he said, "USMCA is a great deal for all three countries, (it) solves the many deficiencies and mistakes in NAFTA, greatly, (it) greatly opens markets to our farmers and manufacturers, reduces trade barriers to the U.S. and will bring all three great nations together in competition with the rest of the world."
A deal is only as good as it is for all parties to it.
USMCA is making North America great again.
Bradley A. Blakeman was a deputy assistant to President George W. Bush from 2001 to 2004. A principal of the 1600 Group, a strategic communications firm, he is an adjunct professor of public policy and international affairs at Georgetown University and a frequent guest on Fox News and Fox Business. Mr. Blakeman is also a registered lobbyist for the Communications Workers of America. Read Bradley Blakeman's Reports — More Here.
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