A new trade agreement for North America has been reached. The Chamber has worked to emphasize the importance of reaching an agreement that preserves the trilateral nature of the North American trading block, a fundamental component of NAFTA.
Announced September 30, the United States-Mexico-Canada Agreement (USMCA) modernizes and improves several chapters from the original NAFTA while integrating new chapters to reflect industry needs and the changing economy. New chapters address small and medium sized businesses, energy, intellectual property, digital trade, and financial services, amongst others. USMCA contains stronger labor and environmental regulations than previous and existing agreements and a customs and trade facilitation chapter which reduces inefficiencies in customs processing, moves toward automation and electronic submissions by codifying enhancements made in recent years such as Unified Cargo Processing. This further reduces barriers to trade, a burden which San Diego bares as the host of the busiest land border crossing in the western hemisphere. Reducing these barriers are as effective as eliminating tariffs.
Another chapter of importance to the San Diego region is Chapter 16 which maintains the TN Visa. This is an important tool for regions like ours to attract and retain entrepreneurs and a growing workforce.
It is worth noting that consensus was reached on some of the more controversial issues including the sunset clause which calls for a review of the agreement in six years. In addition, the dispute resolution chapter remains intact. Unfortunately, steel and aluminum tariffs on imports from Mexico and Canada continue to be in effect. It is critically important to end these tariffs on imports from our top trading partners and fully restore our cross border partnerships and collaboration.
During the Chamber’s delegation trip to Washington D.C., USMCA was described across agencies as a model for future trade agreements and an “anchor” for the trilateral relationship. The signing of the agreement is expected to take place on November 30th after which formal analysis, reports and draft legislation are issued. The legislative branches of the three countries will then consider approval of the agreement which is needed prior to official ratification and implementation.
The Chamber and partner organizations will be hosting informational forums. Please contact Kenia Zamarripa for more information.