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The new United\nStates-Mexico-Canada Agreement (USMCA) is the largest trade deal in American\nhistory and is a big win for companies, farmers, shippers and workers\nthroughout the country. This trade agreement directly attacks the colossal\n$81.5 billion trade deficit in goods the United States has with Mexico, and the\n$19.7 billion trade deficit in goods with Canada.<\/p>\n\n\n\n
While many Americans are\nunaware of the specifics of the deal, the details \u2013 and their implications for\nAmerican companies \u2013 are stunning. USMCA eliminates many practices and trade\nbarriers that have long hindered U.S.-companies\u2019 access to the Mexican and\nCanadian markets.<\/p>\n\n\n\n
Importantly, the USMCA updates\nthe rules-of-origin for automobiles by requiring that 75% of the content of\nvehicles be produced in North America, and that 40%-45% be made by workers\nearning an average of at least $16 per hour. These provisions are expected to\ncreate 75,000 new jobs in the U.S. automotive sector.<\/p>\n\n\n\n
New rules-of-origin apply to\nother industrial products as well, increasing the regional content of\nchemicals, steel-intensive products, titanium, glass and optical fiber. These\nnew rules will ensure that only producers who use sufficient amounts of\nregionally made parts or materials receive preferential tariff benefits.<\/p>\n\n\n\n
Mexico and Canada are\nrespectively our largest and second largest export markets, and the numbers\nprove it. Last year, truck freight at the U.S.-Mexico border totaled $424\nbillion; rail freight was $78 billion; vessel freight was $67 billion; and air\nfreight was $17 billion. At the U.S.-Canada border, truck freight was $348\nbillion; rail freight was $100 billion; and both air and vessel freight were\n$30 billion.<\/p>\n\n\n\n
Within the agreement are\nimportant new chapters, such as: Digital Trade; IPR Protection; Anticorruption;\nSmall and Medium-Sized Enterprises; Currency Manipulation; State-Owned\nEnterprises; and Good Regulatory Practices.<\/p>\n\n\n\n
The Digital Trade chapter\nincludes rules that allow data to be transferred freely across borders and\nprohibits protectionist limits on the location of data storage and processing.\nThis is a big win for U.S. companies that operate internationally.<\/p>\n\n\n\n
The Intellectual Property chapter includes tough enforcement provisions against counterfeiting and piracy. This is a huge problem with many consumer and industrial products. Fakes now account for $500 billion in sales, draining American companies that have worked decades on building strong brands. With USMCA, the U.S. will finally have new tools for customs officials to use to impede the flow of counterfeit goods through our borders.<\/p>\n\n\n\n