E. Komkova (email@example.com),
Institute for U.S. and Canadian Studies, Russian Academy of Sciences (ISKRAN), 2/3, Khlebny Per., Moscow, 121069, Russian Federation
The U. S. President Trump administration has made NAFTA re-negotiation and modernization a priority of its trade policy. D. Trump has repeatedly characterized this agreement as the “worst trade deal” in history and has stated that he may seek to withdraw from the agreement. The U. S. talks with Mexico and Canada began on August 16, 2017. After more than a year of intense negotiations the three North American countries have finally reached a deal that was renamed Agreemrnt between the United States of America, the United Mexican States, and Canada (USMCA). USMCA is based on the NAFTA. Among the most prominent changes are the following: American farmers gain easier access to the tightly regulated Canadian dairy market; guidelines to have a higher proportion of automobiles and spare parts manufactured amongst the three countries rather than imported from abroad; strengthened environmental and labor regulations, increased intellectual rights protection and de minimis customs threshold for duty free treatment. New issues, such as digital trade, currency manipulation, stronger disciplines for operations of the state-owned enterprises, and relations with non-market economies, are also addressed. They may serve as a template for trade deals under the Trump administration in the future. The USMCA will take effect after ratification by all three parties, which is probable but not guaranteed. This article analyses key changes in USMCA by comparing it with NAFTA; describes peculiarities of the NAFTA re-negotiation; identifies winners and losers; assesses perspectives of USMCA ratification and its international consequences. The United States-Mexico-Canada Agreement represents a mix of free trade provisions with elements of managed trade, especially in the automotive industry. Its mere signing is not a small accomplishment in the era of backlash to free trade and economic globalization.
United States-Mexico-Canada Agreement (USMCA), NAFTA, trade policy, Trump administration, U.S. – Canada relationship, economic integration, North America, pending ratification, international consequences
1. 2019 Trade Policy Agenda and 2018 Annual Report. Annex 1. Washington. March 2019. Available https://ustr.gov/sites/default/files/2019_Trade_Policy_Agenda_and_2018_Annual_Report.pdf (accessed 01.04.2019).
2. Grigor’eva E.E. Gosudarstvennoe upravlenie sel’skokhozyaistvennym proizvodstvom v Kanade [State management of agro-industrial sector in Canada]. Moscow, VIAPI im. A.A. Nikonova, 2018. 179 p.
3. Simpson K. No Gala USMCA Signing Ceremony with Trump unless U. S. Tariffs Lifted, Ambassador Said. CBC News, 07.11.2018. Available at: https://www.msn.com/en-ca/news/canada/no-gala-usmca-signing-ceremony-with-trumpunless-us-tariffs-lifted-ambassador-says/ar-BBPszsF (accessed 08.11.2018).
4. Fergusson I.F., Villareal M.A. Proposed U. S.-Mexico-Canada (USMCA) Trade Agreement. In Focus, no. 10997, (Congressional Research Service) 05.10.2018. Available at: https://fas.org/sgp/crs/row/IF10997.pdf (accessed 01.11.2018).
5. Agreement between the United States of America, the United Mexican States and Canada Text. Available at: https://ustr.gov/tradeagreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between (accessed 05.12.2018).
6. Weekes J. How NAFTA Became the USMCA. Policy Magazine, 02.11.2018. Available at: https://policymagazine.ca/hownafta-became-the-usmca/ (accessed 03.11.2018).
7. Transcript of President Donald Trump’s Press Conference on September 26, 2018. Available at: https://www.vox.com/2018/9/26/17907608/trump-kavanaugh-rosenstein-press-conference-un-nafta-full-text-transcript (accessed 04.11.2018).
8. Hufbauer G., Globerman S. The United States-Mexico-Canada Agreement: Overview and Outlook. Fraser Research Bulletin (Fraser Institute). November 2018. 10 p. Available at: https://www.fraserinstitute.org/sites/default/files/us-mexico-canadaagreement-overview.pdf (accessed 15.11.2018).
9. Wasson E., Leonard J. Republicans Push for Vote on New NAFTA This Year if Democrats Win House. Bloomberg News, 02.10.2018. Available at: https://www.bloomberg.com/news/articles/2018–10–02/gop-to-seek-trade-bill-vote-this-yearif-democrats-win-house (accessed 03.10.2018).
10. Schott J.J. For Mexico, Canada and the United States, a Step Backwards on Trade and Investment. Peterson Institute for International Economics. 02.10.2018. Available at: https://piie.com/blogs/trade-investment-policy-watch/mexicocanada-and-united-states-step-backwards-trade-and (accessed 03.10.2018).
11. Nossal K.R. The Name Game: out with NAFTA, in with the USMCA. OpenCanada.org, 1 October 2018. Available at: https://www.opencanada.org/features/name-game-out-nafta-usmca/ (accessed 02.10.2018).
12. Gilmore R. Reaction to USMCA Deal Rolls in: not “a Great Win”, but a “Great Save”. CTV News, 01.10.2018. Available at: https://www.ctvnews.ca/politics/reaction-to-usmca-deal-rolls-in-not-a-great-win-but-a-great-save-1.4117233 (accessed 02.10.2018).
13. MacDougall A. Trump Wins, But not Enough for Trudeau to Lose. Maclean’s, 01.10.2018. Available at: https://www.macleans.ca/news/canada/how-nafta-was-saved-the-bitter-fight-and-last-minute-recovery/ (accessed 02.10.2018).
14. Dawson L. Canada’s Trade Negotiators Took the Best Deal Available. Canada Institute, Wilson Center. 02.10.2018. Available at: https://www.wilsoncenter.org/article/canadas-trade-negotiators-took-the-best-deal-available (accessed 03.10.2018).
15. House B., Hererra J.M. NAFTA: USMCA Preserves Open Trade in North America. Insights & Views (Scotiabank Global Economics), 01.10.2018. Available at: https://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/2018-10-01_I&V.pdf (accessed 02.10.2018).
16. Wilkins C.A. Monetary Policy Report Press Conference Opening Statement. Bank of Canada. 24.10.2018. Available at: https://bankofcanada.ca/2018/10/opening-statement-241018/ (accessed 25.10.2018).
17. Bipartisan Congressional Trade Priorities and Accountability Act of 2015. Available at: https://www.congress.gov/bill/114thcongress/house-bill/2146/text/pl (accessed 04.09.2017).
18. Remarks by President Trump in Press Gaggle aboard Air Force One. 02.12.2018. Available at: https://whitehouse.gov/briefingsstatements/remarks-president-trump-press-gaggle-aboard-air-force-one-2/ (accessed 03.12.2018).