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Current Affairs

USMCA trade group

Date: 13 December 2019 Tags: Miscellaneous

Issue

Mexico's Senate has approved the revised U.S.-Mexico-Canada (USMCA) trade deal that includes tougher enforcement of worker rights and the elimination of a patent provision for biologic drugs.

 

Background

Senators approved the changes to USMCA, which was signed more than a year ago to replace the North American Free Trade Agreement (NAFTA).

 

Details

  • Once it passes into law in the three countries, USMCA will encompass $1.2 trillion in annual trade across the continent and support 12 million U.S. jobs and a third of American agricultural exports.

  • Democrats controlling the U.S. House of Representatives had insisted on major changes to labor and environmental enforcement in USMCA before bringing it to a vote in the United States.

USCMCA

  • The Agreement between the United States of America, the United Mexican States, and Canada is a signed but not ratified free trade agreement between Canada, Mexico, and the United States.

  • Compared to NAFTA, USMCA increases environmental and labour regulations, and incentivizes more domestic production of cars and trucks.

  • The agreement also provides updated intellectual property protections, gives the United States more access to Canada's dairy market.

  • Additionally, there is a stipulation that the agreement itself must be reviewed by the three nations every six years, with a 16-year sunset clause. The agreement can be extended for additional 16-year terms during the six-year reviews.

  • The deal establishes requirements for currency and macroeconomic transparency which, if violated, would constitute grounds for a dispute appeal.