Some of the main points of disagreement are between the United States and Mexico. U.S. Trade Representative Robert Lighthizer said last month that he was already anticipating fierce battles with Mexico over labor, biotechnology, intellectual property and energy, all of which are areas of interest to Capitol Hill lawmakers. “We have always fully complied with all of our commitments under our [free trade agreements], including to the United States, and that will not change,” Canadian Ambassador to the United States Kirsten Hillman told POLITICO. The USMCA comes into force amid tensions between the United States and Canada over the Trump administration`s recent threat to re-reverse tariffs on Canadian aluminum imports. The pact is far from a definite success. It also ends amid growing trade tensions with Canada and widespread concern about Mexico`s ability to impose occupational health and safety. In addition, all the economic benefits and job gains are still years away. The North American Free Trade Agreement (NAFTA) is a treaty of the United States, Canada and Mexico. it came into force on 1 January 1994. (Since 1989, there has been free trade between the United States and Canada; NAFTA has extended this regime.) On that day, the three countries became the largest free market in the world – the combined economies of the three nations were $6 trillion and directly affected more than 365 million people.
NAFTA was created to remove customs barriers for agriculture, manufacturing and services; Eliminating restrictions on investment protection of intellectual property rights. This should be done while respecting environmental and labour concerns (although many observers point to the fact that the three governments have been negligent in environmental and safety at work since the agreement came into force). Small businesses were among those expected to benefit the most from the removal of trade barriers, as this would reduce trade activity in Mexico and Canada and reduce the administrative burden associated with importing or exporting goods. NAFTA required automakers to produce 62.5 per cent of the vehicle`s content in North America in order to qualify for a zero tariff. With the new agreement, this threshold will be increased to 75 per cent over time. This should force automakers to buy fewer parts for a “Assembled in Mexico” car in Germany, Japan, South Korea or China.