A look at the USMCA.

It’s quite the start to the work week.

After 13 months of (often heated) negotiations, we woke Monday morning to news that a tentative new trade agreement had been reached between Canada, the U.S., and Mexico.

The United States-Mexico-Canada Agreement (USMCA) – as it would be called – contains some updated items, and some of the original structure of the old North American Free Trade Agreement (NAFTA).

A joint statement released by the U.S., Canadian, and Mexican governments state that the USMCA “will give workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

The USMCA addresses automotive content for vehicles produced in North America, as well as percentage of labour content for Mexican workers in the automotive sector. Other highlights of the new agreement include:

The agreement does not address 25% and 10% U.S. tariffs on Canadian steel and aluminum respectively, imposed last May under section 232 (tariffs on national security grounds). These tariffs – and Canada’s own countermeasure tariffs – currently remain in effect, and will be addressed separately.

Before it can take effect, the USMCA must first be ratified by all three countries. We’ll be watching these developments and offering updates as we receive them.

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