USMCA Instead of NAFTA

DOI: 10.20542/0131-2227-2019-63-4-50-58

E. Komkova (,
Institute for U.S. and Canadian Studies, Russian Academy of Sciences (ISKRAN), 2/3, Khlebny Per., Moscow, 121069, Russian Federation

Abstract. 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.

Keywords: United States-Mexico-Canada Agreement (USMCA), NAFTA, trade policy, Trump administration, U.S. – Canada relationship, economic integration, North America, pending ratification, international consequences


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For citation:
Komkova E. USMCA Instead of NAFTA. World Eonomy and International Relations, 2019, vol. 63, no. 4, pp. 50-58.

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