The United States-Mexico-Canada Agreement (USMCA), which was signed in November 2018, replaces the North American Free Trade Agreement (NAFTA). The USMCA, like NAFTA, aims to promote free and fair trade among the three North American nations. However, the new agreement includes several updates and changes that will impact various industries. Here are the key details of the USMCA agreement.

1. Automobile Industry

Under the USMCA, automakers have to comply with new rules of origin when it comes to sourcing auto parts. The new regulations require that 75% of a car’s parts must be manufactured in North America (up from 62.5% under NAFTA) to qualify for duty-free treatment. Additionally, 40-45% of car parts must be made by workers earning at least $16 per hour.

2. Agriculture Industry

The USMCA eliminates Canada’s Class 7 milk pricing system, which allowed Canadian farmers to sell milk products at lower prices and has been a contentious issue in trade talks. The agreement also increases market access for US dairy farmers by allowing them to sell roughly 3.6% of Canada’s dairy market.

3. Intellectual Property

The USMCA includes new provisions aimed at protecting intellectual property rights, especially in the digital space. Under the agreement, internet service providers are required to take down pirated material upon notification. The agreement also includes an extension of copyright protections from 50 to 70 years after the creator’s death.

4. Labor Standards

The USMCA requires Mexico to pass and enforce new labor laws, which will afford more rights and protections to workers. The agreement also establishes a rapid-response mechanism to address alleged violations of labor rights. Additionally, the USMCA includes the creation of a new Interagency Labor Committee on North American Trade, which will be tasked with monitoring labor obligations under the agreement.

5. Environmental Standards

The USMCA includes new environmental provisions that address air quality, marine litter, and endangered species, among other things. The agreement also includes the creation of a new Environmental Cooperation Commission to coordinate environmental enforcement efforts among the three countries.

In conclusion, the USMCA agreement represents a significant update to NAFTA and includes many new provisions that will impact various industries. The agreement aims to promote free and fair trade among the United States, Mexico, and Canada while also addressing issues such as intellectual property, labor rights, and environmental protections. As businesses and industries adapt to the new regulations and rules, it’s important to keep these details in mind to stay compliant and competitive in the global market.