This morning, President Trump signed the United States- Mexico-Canada-Agreement (USMCA). The United States House and Senate have approved the agreement to replace the North American Free Trade Agreement (NAFTA). Mexico previously approved the agreement in 2019, and Canada’s Parliament is expected to this week.
In addition to approval by Mexico and Canada, the agreement had to satisfy Democrats in the House, Republicans in the Senate, large businesses and labor unions. It was an exercise in bipartisanship that gave no group everything it wanted, but ultimately got all sides to “yes.”
The three countries held eight rounds of negotiations over three years before reaching an agreement in 2019. International trade has changed significantly since January 1994 when NAFTA went into effect and USMCA seeks to address these changes, including the addition of product categories that did not exist 25 years ago.
The U.S pushed for greater access to Canada for American agricultural products, and it demanded the modernization of Mexican labor laws aimed at reducing the wage gap between U.S and Mexican workers. Complex products like cars will now require a higher percentage of North American parts to qualify for duty-free treatment.
The Greater Arlington Chamber joined the US Chamber, the Metro Eight Chambers and the Coalition of East Tarrant Chambers to lobby strongly for passage of the agreement. Texas stands to gain the most among U.S states from the agreement. Mexico is Texas’ largest international trading partner followed by Canada.