Describe NAFTA / UMCA?
NAFTA: The North American Free Trade Agreement, was signed by the United States, Canada, and Mexico. ‘World largest Trade pact’ which was signed in 1993 by Bill Clinton stating NAFTA as ‘JOBS’ that went into effect on January1, 1994 that eliminated tariffs and trade restrictions between three nations. The agreement is 2000 pages, with eight sections and 22 chapters.
USMCA: The U.S. Mexico Canada Agreement (USMCA), is an agreement signed by the governments of U.S., Canada and Mexico on November 30th ,2018 on the margins of the G20 Leaders’ Summit in Buenos Aires. It is intended to replace the NAFTA (North American Free Trade Agreement) which creates a revised free trade system between the 3 parties that marks recent and emerging hypercritical problems, such as the systematizing of regulatory systems, the protection of intellectual property and e-commerce.
When did NAFTA come into effect? When does USMCA come into effect?
NAFTA was enrolled treaty into law on December 8, 1993. It was enforced on January 1, 1994. USMCA was signed on November 30, 2018 at the G20 Leaders’ Summit in Buenos Aires.
Purpose of NAFTA/USMCA
There were seven important goals for NAFTA such as:
- Grant the signatories a ‘most-favored-nation’ status
- Eradicate barriers to business and assist the cross-border movements of goods and services.
- Promote limitations of rivalries.
4.Increase speculation openings
5. Give assurance and requirement of licensed innovation rights.
6. Makes methodology of the goals of exchange debates.
7. Demonstrate a structure for further trilateral, regional and multilateral union to elaborate the trade agreement’s benefit.
USMCA is most up-to-date regulation between the 3 countries in foreign trade. It added more rules to NAFTA for Dairy and Agriculture, Intellectual Property, Automobile industry, Digital Trade, State owned enterprises and textiles industry.
Who has benefited most from NAFTA since its inception?
All the 3 countries have benefited from the NAFTA however USA is the most benefited state among them. According to the study conducted by American Farm Bureau 30% of U.S. agriculture exports were exported to either Canada or Mexico. Agriculture industry in USA skyrocketed with an incredible pace in exports. It also created 5 million new jobs in USA.
What are the specific differences between USMCA & NAFTA?
- Vehicle prerequisites to meet all requirements for zero tax have been made stricter.
- US dairy producers get more access to Canadian journal advertise.
- Canada and Mexico can't make economic accords with China without advising US and US can leave USMCA if an arrangement is struck Currency manipulation is not allowed.
- Intellectual property extended to 70 years after the life of the author.
- Digital contents Not subjected to duties.
Has Canada benefited from NAFTA/USMCA?
In the year 2016, trade with Canada’s largest trading partner US was worth a whopping amount of $752 billion. NAFTA removed some of the trading barriers among the three countries.
The 5 key elements Canadians have benefited from NAFTA are: A wider variety of products, Increased trade, Improved direct foreign investment, Freer movement of professionals and investors across the border, New job openings.
Will the recent American political changes affect NAFTA’s/USMCA’s future?
Recently the House, the Chamber and the Senate of United states approved the USMCA agreement. On January 29 President Trump signed the revised agreement into law on Wednesday, fulfilling a campaign promise. The deal has an impact on the U.S influence on the Canadian diary market, and a scale-back of the investor state dispute settlement rules.
When ratified, what will the new agreement be called?
The new agreement after NAFTA will be known as USMCA which is an acronym for United States – Mexico – Canada. In some regions and article, it also mentioned as CAMUS or MUSCA.
What significant changes were needed to break the negotiation statement?
- US and Canada should consider the labor reforms put by labor group leaders including Richard Trumka, president of the powerful AFL-CIO union.
- USA should not interfere in Canada’s local dairy farm business which may affect the Canadian local market farmers.
- Stop shortening the patent protection for a class of drugs known as biologics to eight years from 10. Pharmaceutical patent principles need to more readily adjust customer interests too.
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- From NAFTA to USMCA: Understanding Changes to Free Trade in North America. (n.d.). Retrieved from https://www.livingstonintl.com/nafta/
- Amadeo, K. (2019, December 11). History and Purpose of NAFTA. Retrieved from https://www.thebalance.com/history-of-nafta-3306272From NAFTA to USMCA: Understanding Changes to Free Trade in North America. (n.d.). Retrieved from https://www.livingstonintl.com/nafta/Long, H. (2019, December 10). The USMCA is finally done. Here's what is in it. Retrieved from https://www.washingtonpost.com/business/2019/12/10/usmca-is-finally-done-deal-after-democrats-sign-off-heres-what-is-it/
- Amadeo, K. (n.d.). 6 Hidden Benefits of NAFTA. Retrieved from https://www.thebalance.com/advantages-of-nafta-3306271
- vinodmeltoe Follow. (2019, January 26). What is usmca or the new nafta 2.0 and what are the usmca differences. Retrieved from https://www.slideshare.net/vinodmeltoe/what-is-usmca-or-the-new-nafta-20-and-what-are-the-usmca-differences?qid=9b723ecf-902b-45a8-927d-17cfb6ff44e3&v=&b=&from_search=5 Five Flaws in the USMCA and How to Fix Them. (2019, August 6). Retrieved from https://www.piie.com/blogs/trade-and-investment-policy-watch/five-flaws-usmca-and-how-fix-them
- Five Flaws in the USMCA and How to Fix Them. (2019, August 6). Retrieved from https://www.piie.com/blogs/trade-and-investment-policy-watch/five-flaws-usmca-and-how-fix-them
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