USMCA

A trade deal with Mexico and Canada for American prosperity.

America First Policies believes the North American Free Trade Agreement (NAFTA), signed in 1994, should be revised to protect the interests of our American workers, farmers, ranchers, and businesses. The US-Mexico-Canada Agreement (USMCA), signed in November 2018 by President Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto, will replace NAFTA and promote economic growth and job creation in the United States; strengthen our manufacturing base and our national security; expand our agricultural, digital and services industry exports; and protect U.S. intellectual property rights. A fair and balanced trade deal with our North American neighbors will bring jobs back to America’s shores, bring supply chains back from Asia, increase wages and incomes, and support U.S. manufacturing and agriculture.

The Facts:

The USMCA includes new rules of origin and origin procedures, including product-specific rules for passenger vehicles, light trucks, and auto parts. This update to the rules of origin will encourage United States manufacturing and regional economic growth by requiring that 75 percent of auto content be made in North America.

The new automobile rules of origin will:

  • Help to preserve and re-shore vehicle and parts production in the United States and transform supply chains to use more United States content.
  • Drive higher wages by requiring that 40-45 percent of auto content be made by workers earning at least $16 per hour.
  • Incentivize new vehicle and parts investments in the United States.
  • Encourage more investment by auto companies in research and development in the region.
  • Help ensure that only producers using sufficient and significant North American parts and materials receive preferential tariff benefits.

The USMCA will enable food and agriculture to trade more fairly, and expand exports of American agricultural products.

  • America’s dairy farmers will have new export opportunities to sell dairy products in Canada.  
  • Canada will provide new access for United States products including fluid milk, cream, butter, skim milk powder, cheese, and other dairy products.

The USMCA provides strong and effective protection and enforcement of Intellectual Property rights critical to driving innovation, creating economic growth, and supporting American jobs.

The IP Chapter will:

  • Include 10 years of data protection for biologic drugs and a robust scope of products eligible for protection.
  • Protect copyright and related rights so United States creators have the same protections as their Canadian and Mexican counterparts.
  • Continue to provide strong patent protection for innovators.

The new Digital Trade chapter contains the strongest disciplines on digital trade of any international agreement, providing a firm foundation for the innovative products and services of the United States.

The updated Financial Services chapter promotes a level playing field for U.S. financial institutions, investors and investments in financial institutions, and cross-border trade in financial services. It preserves the discretion of financial regulators to ensure financial stability.

Click here for Senior Policy Advisor Curtis Ellis' interview on possible U.S.-Canada trade deal from August 30, 2018.

Click here for Senior Policy Advisor Curtis Ellis' interview on U.S.-Mexico trade deal from August 28, 2018.

Background:

Office of the United States Trade Representative, Executive Office of the President, USMCA Modernizing NAFTA into a 21st Century Trade Agreement, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/october/united-states%E2%80%93mexico%E2%80%93canada-trade-fa-1

Office of the United States Trade Representative, Executive Office of the President, USMCA Rebalancing Trade to Support Manufacturing, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/october/united-states%E2%80%93mexico%E2%80%93canada-trade-fa-0

Office of the United States Trade Representative, Executive Office of the President, USMCA Strengthening North American Trade in Agriculture, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/october/united-states%E2%80%93mexico%E2%80%93canada-trade-fa-2

Office of the United States Trade Representative, Executive Office of the President, USMCA Supporting America’s Small and Medium-Sized Businesses, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/november/united-states%E2%80%93mexico%E2%80%93canada-agreement

Office of the United States Trade Representative, Executive Office of the President, “The President’s 2017 Trade Policy Agenda,” March 2017, https://ustr.gov/sites/default/files/files/reports/2017/AnnualReport/Chapter%20I%20-%20The%20President%27s%20Trade%20Policy%20Agenda.pdf

Read More:

U.S. Secretary of Commerce Wilbur Ross, “These NAFTA Rules are Killing Our Jobs,” Washington Post, September 21, 2017, https://www.washingtonpost.com/opinions/wilbur-ross-these-nafta-rules-are-killing-our-jobs/2017/09/21/657bee58-9ee6-11e7-9083-fbfddf6804c2_story.html?utm_term=.6a1148679851

Dan DiMicco, “A Nation That Builds Things,” Wall Street Journal, December 15, 2009, https://www.wsj.com/articles/SB10001424052748704398304574598031665178094

U.S. Secretary of Commerce Wilbur Ross, “Free Trade is a Two-Way Street,” Wall Street Journal, July 31, 2017, https://www.wsj.com/articles/free-trade-is-a-two-way-street-1501542569

Jeff Faux, “NAFTA, Twenty Years After: Disaster,” Economic Policy Institute, January 3, 2014, https://www.epi.org/blog/nafta-twenty-years-disaster/

Laura Carlsen, “Under Nafta, Mexico Suffered, and the United States Felt Its Pain,” New York Times, November 24, 2013, https://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta/under-nafta-mexico-suffered-and-the-united-states-felt-its-pain

Nina Pavcnik, “The Impact of Trade on Inequality in Developing Countries,” Dartmouth College, August 25, 2017, https://www.dartmouth.edu/~npavcnik/docs/JH%20Inequality.pdf

Curtis Ellis, “Will Congress Betray USA with USMCA Opposition?,” World Net Daily, November 9, 2018, https://www.wnd.com/2018/11/will-dems-betray-america-with-usmca-opposition/

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