Us Mexico Agreement Details
In addition to the provisions of the original NAFTA, the USMCA draws heavily on the Trans-Pacific Partnership (TPP) and Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreements. On April 3, 2020, Mexico announced its readiness to implement the agreement and join Canada.  The agreement entered into force on 1 July 2020.     For the first time, the new agreement also provides that 40 to 45% of parts must come from a so-called high-wage factory for each vehicle duty-free. These factories must pay at least 16 $US per hour in average wages for production workers. That`s about three times the average wage at a Mexican plant right now, and government officials hope that either this provision will force automakers to buy more deliveries from Canada or the U.S., or raise wages in Mexico. Canada ratified the agreement in March and the USMCA entered into force on July 1, 2020. Although NAFTA is officially dead, governments and businesses are still adapting to the new rules, especially the new labor rules. The coronavirus could also complicate implementation, as manufacturers will adapt to new guidelines in the midst of a global economic crisis. The cheese agreement between the United States and Mexico. (PDF, 3 pages, 0.01 MB) On June 1, 2020, the USTR Robert Lighthizer office released the Uniform Rules, the last hurdle before the agreement was implemented on July 1, 2020. While NAFTA agriculture has generally developed well, significant improvements to the agreement will ensure fairer trade in food and agriculture and increase exports of U.S. agricultural products.
The agreement gives U.S. farmers additional access to foreign markets, particularly in Canada. It does not demonize Canada`s “supply management system,” which dictates how much Canadian farmers must produce in order for them to be profitable. But Canada has agreed to eliminate a program that helps sellers of certain dairy products in Switzerland and abroad and opens its market to U.S. milk, cream, butter, cheese and other products. In return, the U.S. has expanded market access for Canadian dairy products and sugar. The provisions of the agreement cover a wide range of agricultural products, homelessness, manufactured goods, working conditions, digital trade and others. Among the most important aspects of the agreement are better access for U.S. dairy farmers to the Canadian market, guidelines for a greater proportion of automobiles produced in the three countries instead of being imported from other countries, and the maintenance of the dispute settlement system, similar to that contained in NAFTA.   In an annex to the agreement, Mexico also committed to adopt wide-reaching legislative amendments to combat forced labour and violence against workers and to allow for independent trade unions and labour tribunals.
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