New Trade Agreement Highlights

For the first time, a trade deal will require that, during his 2016 election campaign and presidency, Trump harshly criticized NAFTA (it has often been called “perhaps the worst trade deal of all time”),[105] while he hailed the USMCA as “a great deal for all of us.” [106] However, the USMCA is very similar to nafta, has adopted many identical provisions and has made only modest changes, mostly cosmetic,[107] and is expected to have only a limited economic impact. [108] Former U.S. Trade Representative Mickey Kantor, who oversaw the signing of NAFTA during Bill Clinton`s administration, said, “This is really NAFTA of origin.” [109] Increasing the level of de minimis with major trading partners such as Mexico and Canada is an important outcome for small and medium-sized enterprises (SMEs) in the United States. These SMEs often cannot afford to pay tariffs and taxes and bear the increase in compliance costs, which, due to their low trading volume, are due to lower-value emissions due to their low level of de-administration. The agreement is designated differently by each signatory – in the United States, it is called the U.S.-Mexico-Canada Agreement (USMCA); [1] [23] in Canada, it is officially known as the Canada-U.S.-Mexico Agreement (CUSMA) in English[24] and the Canada-U.S.-Mexico Agreement (ACEUM) in French; [25] and in Mexico, tratado is called tratado between México, Estados Unidos y Canadé (T-MEC). [26] [27] The agreement is sometimes referred to as “New NAFTA”[28][29] with respect to the previous trilateral agreement for the successor, the North American Free Trade Agreement (NAFTA). An April 2019 Analysis by the International Trade Commission on the likely effects of the USMCA estimated that the agreement would increase U.S. real GDP by 0.35 percent if the agreement were fully implemented (six years after ratification) and would increase total U.S. employment by 0.12% (176,000 jobs). [114] [115] The analysis cited by another Congressional Research Service study showed that the agreement would not have a measurable effect on employment, wages or overall economic growth. [114] In the summer of 2019, Larry Kudlow, Trump`s chief economic adviser (the director of the National Economic Council at Trump White House), made unfounded statements about the likely economic impact of the agreement and overstated forecasts related to jobs and GDP growth. [114] To see the full text of the agreement between the United States, Mexico and Canada, click here.