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USMCA passes U.S. Senate

USMCA passes U.S. Senate

On January 16, 2020, the U.S. Senate officially approved the U.S.-Mexico-Canada Agreement (USMCA) following its approval from United States House of Representatives in December 2019.  The new USMCA was voted by the House of Representatives 385-41 and by the U.S. Senate 89 to 10.  Next step is presidential proclamation and a signature into law by the President himself.  This news comes after years of negotiations.

Mexico was the first country to ratify the deal and officially passed the deal in December, however, the new USMCA will not take full effect until Canada officially approves. The House of Commons is expected to hold a vote in the next few weeks.

According to CNBC, “This is the first-ever trade coalition of workers, farmers, Republicans, Democrats, business and agriculture groups, organized labor and much more,” U.S. Trade Representative Robert Lighthizer said in a statement celebrating the vote.”

USMCA

International trade attorneys, Husch Blackwell, summarize some of the changes listed below:

“While similar to the North American Free Trade Agreement (“NAFTA”) in many ways, the USMCA makes several key changes to NAFTA.  Among the changes are provisions for digital trade, allowing data to flow more freely across borders.  It also implements new local wage requirements and stricter local content requirements for the automotive sector, in addition to establishing a system to monitor workers’ conditions in Mexico.  Depending on the product in question, the USMCA rules of origin may or may not change from those currently applied under NAFTA.  For certain products, it is possible that the USMCA rules of origin could even provide for more flexibility than those under NAFTA.  As a result, U.S. importers should not assume that NAFTA-eligible products will remain eligible under the USMCA (or vice versa) and should evaluate the new rules of origin carefully for their products.”

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