The United States Mexico Canada All Belong to This Free-Trade Agreement

The United States, Mexico, and Canada are among the world`s largest economies, and trade relations among them are essential. The three countries joined forces to establish the North American Free Trade Agreement (NAFTA) in 1994, which aimed to eliminate barriers to trade and investment. However, in 2020, the three countries agreed to replace NAFTA with the United States-Mexico-Canada Agreement (USMCA).

USMCA is a free trade agreement that aims to strengthen economic ties among the three countries while modernizing and updating NAFTA. The new agreement`s main objectives are to increase trade in North America, encourage fair competition among trading partners, and promote economic growth and job creation.

The USMCA`s provisions include new rules for automobile manufacturing, intellectual property, labor laws, and environmental standards. USMCA also aims to create a level playing field for all three countries by reducing trade barriers and eliminating tariffs.

The agreement includes several provisions that benefit the United States, such as requiring that 75 percent of automobile components be made in North America to qualify for duty-free trade. Additionally, the USMCA includes a provision that requires 40-45 percent of automobile parts to be manufactured by workers earning at least $16 per hour, which is a significant increase from the previous level of $2.30 per hour.

In Mexico, USMCA`s provisions include improved labor and environmental standards. The agreement requires Mexico to recognize workers` right to collective bargaining and adopt measures to enforce labor laws. USMCA also requires Mexico to take action to protect marine life and the environment.

In Canada, USMCA`s provisions include opening up its dairy market to US farmers, increasing intellectual property protection, and updating its rules of origin for automotive manufacturing.

Overall, USMCA aims to improve North American trade relations, promote economic growth, and create jobs in all three countries. The free trade agreement benefits the United States, Mexico, and Canada by reducing trade barriers, strengthening competition, and promoting fair trade practices. The USMCA ensures that North American trade relations remain robust and beneficial to all three countries.