The United States, Mexico, and Canada have reached an agreement to update, after 24 years, the North American Free Trade Agreement (NAFTA) and turn it into a high-level agreement to respond to the needs of the 21st century. The new United States – Mexico – Canada Agreement (USMCA) will support trade that will lead to more free and fair markets and boost solid economic growth in North America.
Many of the central aspects of NAFTA are still in effect, although the USMCA also includes some changes and updates. The agreement increases the percentage of locally manufactured components used in the automotive industry (75 percent by 2020, compared to the current requirement of 62.5 percent). Also, 40 percent of the labor performed on the vehicles must be paid at a rate of $16 per hour by 2023, which is triple the current salary in Mexico. The Canadian dairy product market will be opened to U.S. producers, and the United States will allow the increased import of certain Canadian agricultural products.
The USMCA includes greater protection of intellectual property, including medical patents. It also outlines criminal penalties for pirating movies online and deals with responsibilities related to digital music, books, software, and video games that are distributed electronically. The rules for dispute settlement remain largely intact. The agreement will remain in force for 16 years but could be extended indefinitely throughout the meetings of the three nations that will be held periodically. The legislative bodies of each country are awaiting text of the agreement for approval and expect that the presidents will sign the new agreement at the end of next November.
This being the panorama, the MATT Foundation celebrates this historic moment in the hope that it will be beneficial for all, and that, as a binational agency, MATT can contribute to the various processes promoted by these measures. MATT applauds the agreement among the three nations and acknowledges the efforts of their presidents and task forces.
“There is a lot of work to be done, specifically in the area of public policies that support the new agreements. All our team is ready to identify the conditions offered by this trilateral alliance to continue moving towards our goals and objectives,” says Aracely Garcia-Granados, Executive Director of the MATT Foundation.
Mexicans and Americans Thinking Together (MATT) is a bi-national foundation focused on building bridges of understanding between Mexico and the United States to close the gaps of economic development between both countries and contribute to the quality of life of their inhabitants.