Late Sunday evening The U.S., Mexico, and Canada came to a trilateral trade deal to replace North American Free Trade Agreement (NAFTA). The new agreement is being called USMCA, U.S.-Mexico-Canada Agreement. After a year of negotiations, here are some of the terms that are now public.
- Canada will loosen restrictions on its dairy market that will allow for Americans to export $560 million worth of dairy products.
- Chapter 19 from the original NAFTA will stay in place, allowing Canada, Mexico, and the U.S. to challenge one another’s anti-dumping and countervailing duties in front of a panel or representatives instead of through the courts.
- U.S. steel tariffs of 25% stay in place.
- U.S. drug companies can now sell pharmaceuticals in Canada for 10 years (up from 8 years) before facing generic competition.
- Mexico and Canada get assurance that automobile parts exported to the U.S. will avoid all tariffs, even those put in place down the road.
Other provisions address digital trade, establishing intellectual property, and the combatting of currency manipulation. Once the agreement is signed by all three countries leaders in November, the new deal will still have to be submitted and voted on by Congress in 2019.
This will setup for provisions to take place in 2020 with a mandatory review after the first 6 years. After the first review period, if all parties still agree and are happy with the deal, it will continue for the full 16 year period with an option to renew for another 16 years.