Benefits Of New Nafta Agreement

Benefits Of New Nafta Agreement

After a turbulent few weeks and a last-minute night brawl, the United States, Canada and Mexico have agreed on the principle of a revised North American Free Trade Agreement – a resolution that has been under development for 14 months. The Environment Chapter contains the most enforceable environmental obligations of all previous U.S. agreements, including commitments to combat trade in wildlife, timber, and fish; strengthen law enforcement networks to curb trafficking in human beings; and address pressing environmental issues such as air quality and marine litter. NAFTA has allowed member state companies to offer in all government markets, creating a level playing field for all companies within the limits of the agreement. It has reduced government budget deficits by allowing for increased competition and cheaper bids. The new chapter on digital trade contains the strongest disciplines on digital trade of any international agreement and provides a solid foundation for expanding trade and investment in innovative products and services, for which the United States has a competitive advantage. There are three primary dispute settlement mechanisms that are included in NAFTA. Chapter 20 is the resolution mechanism from one country to another. It is often considered the least controversial of the three mechanisms and was maintained in the USMCA in its original NAFTA form.

Such cases would involve complaints between USMCA member states for violation of a provision of the agreement. [48] Chapter 19 deals with the justification of anti-dumping or countervailing duties. Without Chapter 19, the remedy for the management of these policies would be through the national legal system. Chapter 19 provides that a USMCA body hears the case and acts as the international commercial court in mediating the dispute. [48] The Trump administration has attempted to remove Chapter 19 of the new USMCA text, although it has been maintained so far in the agreement. Fox News reported on December 9, 2019 that negotiators from the three countries have reached an agreement on implementation, paving the way for a final agreement within 24 hours and ratification by all three sides before the end of the year. Mexico has agreed to the imposition of a $16 per hour minimum wage for Mexican autoworkers by a “neutral” third party. Mexico, which imports all of its aluminum, has also objected to the provisions on U.S.

steel and aluminum content in automotive components. [37] For the first time, the new agreement also provides that 40-45% of the parts of each vehicle duty-free must come from a so-called high-wage factory. 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. 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. This agreement is the result of a renegotiation between the member states of the North American Free Trade Agreement from 2017 to 2018, which informally agreed on the terms of the new agreement on 30 September 2018 and formally on 1 October. [10] Proposed by U.S. President Donald Trump, the USMCA was signed on November 30, 2018 by Trump, Mexican President Enrique Peña Nieto, and Canadian Prime Minister Justin Trudeau as a side event of the 2018 G20 Summit in Buenos Aires. . . .

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