Free trade: NAFTA is dead, NAFTA alive!

After more than 16 months of negotiations, Canada decided to in extremisto sign the new Tripartite Free Trade Agreement (see USA / Canada / Mexico: the end clap for NAFTA... and the birth of UMSCA).

The United States and Mexico had already reached a bilateral consensus at the end of August (cf. NAFTA: bilateral agreement between the United States and Mexico).

What are the main changes to the old NAFTA agreement?

• Automotive sector : parts originating inUMSCAmust reach 75% (compared to 62.5% currently) in order to qualify for the exemption from customs duties, and 40% must be produced by workers earning more than USD 16/h. Should the United States introduce tariff measures on automobiles, Canada and Mexico would be exempt.
• Opening of the Canadian agriculture sectorCanada facilitates market access for certain dairy products, poultry and eggs originating in the United States.
• Energy industry sector in MexicoIntroduction of a new chapter in which the United States and Canada recognize that the Mexican state has direct, inalienable and imprescriptible ownership of all hydrocarbons in the subsoil of the national territory.
• Labour law: the parties undertake to:
  • recognize collective bargaining in laws;
  • incorporate ILO labour law standards into national legislation;
  • prohibit imports that do not meet these duties.
• Industrial property :
  • Ten years of data protection for biological products
  • Protection against misappropriation of trade secrets
  • Recognition of new geographical indications.
• Level ofMinimal : establishing thresholds below which importers are exempt from customs duties and/or taxes on imported productsfor courier shipments.This aims to develop e-commerce between the three nations.
  • In Canada, the threshold for taxes increased from CAD 20 to 40, and customs duties on U.S. and Mexican imports increased to CAD 150.
  • Mexico maintains its threshold of USD 50 for taxes on U.S. and Canadian imports, and increases its threshold to USD 117 for tariffs (compared with USD 50 previously).
  • The United States maintains its current USD 800 threshold for imports from Mexico and Canada.
• Revision of the AgreementIt may expire after 16 years. The agreement provides for a review every 6 years to identify and resolve any malfunctions. As a reminder, administrationTrumpasked for a sunset clause « Sunsetclause » After five years.

The official text should be ratified by the three Presidents acting before the end of November 2018.

The three countries welcomed this agreement through press releases:As soon as the official announcement of the signature was made, Trump unilaterally decided to rename the NAFTA agreement in USMCA (United States Mexico Canada Agreement).

A choice contested by its two partners because this name is difficult to translate into French and Spanish, which still promises some discussions...