On September 30, 2018, the Governments of the United States of America and Canada finally reached an understanding regarding their negotiations to modernize or update the North American Free Trade Agreement (“NAFTA”) and thereby allowed them, together with Mexico, to announce the conclusion of the basic negotiation of a new “United States-Mexico-Canada Agreement (“USMCA”)”, which will replace NAFTA. The USMCA has, among other objectives, to preserve and expand the regional trade and production of the three States parties, as well as to improve and promote the competitiveness of regional organizations and exports within a framework of fair competition within our North American region and in the context of world markets.
In accordance with the initial text that the parties have published, this new trilateral agreement will formally enter into force on the first day of the third month following the written notification from the last one of the participating countries, whereby they advise that it has completed its internal procedures required for the entry into force of the USMCA.
Following the line of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”), the USMCA is a last generation free trade agreement which contemplates, among other legal provisions, chapters relating to: Digital Trade, Telecommunications, Competition Policy, State Owned Enterprise, Financial Services, Small and Medium-Sized Enterprises, Dispute Settlement, Macroeconomic Policies and Exchange Rate Matters, in addition to those chapters on trade in goods and services, as well as those on investment that were already covered by NAFTA.
With the announcement of the successful conclusion of negotiations achieving the USMCA will lead to an additional negotiations to achieve the elimination or exemption of the tariffs recently imposed by the United States on aluminum and steel originating and coming from Mexico and Canada; and, consequently, the eventual elimination of the retaliatory measures imposed by these two countries on U.S. products.
The complete text of the USMCA, in the its so-called “Subject to Legal Review for Accuracy, Clarity, and Consistency Subject to Language Authentication” version can be found in the following links:
USMCA | Only available in Spanish
In the near future we will be providing more detailed information on each of the chapters contemplated in the USMCA, by our specialized practice areas on each one of those matters and as a result of the analysis of the final text of the treaty that the Parties make known after the process of formalization and ratification, in accordance with the constitutional ordinances of each one of them.