Historic USMCA Trade Deal Takes Effect

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Posted: Jul 01, 2020 10:45 AM
Historic USMCA Trade Deal Takes Effect

Source: AP Photo/Alex Brandon

The United States Mexico Canada Agreement (USMCA) goes into effect on Wednesday, marking a win for the Trump administration. The deal replaces the North American Free Trade Agreement (NAFTA). President Trump called NAFTA a "disastrous trade deal,” after building a substantial portion of his presidential campaign around replacing it. Previous presidents talked about replacing the decades-old deal, but President Trump is the first to sign a substantive replacement into law.

The USMCA will incentivize production at home by implementing regulations surrounding digital trade, altering rules for trade across borders without tariffs and restructuring labor enforcement systems. In particular, USMCA will bolster job growth in the agriculture sector and auto industry.

President Trump touted USMCA as the "fairest and most balanced" trade deal negotiated thus far:

"When I ran for President, I made a solemn promise to the American people that I would end the job-killing failure called the North American Free Trade Agreement (NAFTA) and replace it with a better deal for our workers, farmers, ranchers, and businesses—the men and women of Main Street who built the most prosperous and equitable economy in human history.  Today, with NAFTA ending forever and the United States-Mexico-Canada Agreement (USMCA) entering into full force, our grateful Nation pays tribute to America’s workers and celebrates their ability to overcome decades of bad deals and failed policies," President Trump said. "The USMCA is the largest, fairest, and most balanced trade agreement ever negotiated and contains innovative provisions to help grow the economy and support American jobs.  It is a tremendous victory for our manufacturers and autoworkers, meaning more cars and trucks will be produced in the United States."

In a rare moment of bipartisan governance, USMCA was sent to President Trump’s desk by overwhelming majorities of both Republicans and Democrats in the House and Senate. Secretary of Commerce Wilbur Ross said that USMCA will add 100,000 jobs to the American economy.