Canada, Mexico and the United States recently signed a fresh overhaul of a quarter-century-old trade pact that aims to improve enforcement of worker rights and hold down prices for biologic drugs by eliminating a patent provision. The 1994 North American Free Trade Agreement (NAFTA) has been blamed for the loss of millions of US manufacturing jobs. The new deal therefore replace NAFTA, thus creating a new agreement called the US-Mexico-Canada Agreement (USMCA). The US and Mexico produced more stringent rules on labor rights aimed at reducing Mexico’s low-wage advantage, including verification of labor compliance by independent labor experts. Who stands to benefit most from this new deal and why?
An excellent question, I think that the United States of America is going through a critical economic period, and there is a kind of decline at the level of its foreign policy, especially in the period of the current president who seems to think more economic logic, and therefore reviewing the agreement falls within a strategy aimed at preserving the current gains and avoiding Losing it, especially with the emergence of new powers, can provide good opportunities for these countries.
There are specific changes in the "new Nafta," apart from the name change, but their impacts are not expected to be great. Specifically, there are changes in labor and parts provisions in the auto industry, some strengthening of environmental provisions, more access for US dairy products to Canada, and an extension of copyright laws. There is also a new provision for review of the agreement and a limit (16 years) on its term. Mexico has ceded its sovereignty in regard to oversight of labor laws through its agreement to pass new labor laws with specified provisions and to allow foreign inspection of their implementation.
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