USMCA, Trump’s new NAFTA deal, explained in 600 words

The leaders of the United States, Mexico, and Canada sign the USMCA on November 30, 2018, at the G20 summit in Buenos Aires, Argentina.
Pablo Martinez Monsivais/AP Photo

The United States Mexico Canada Agreement (USMCA) is an updated version of the nearly 25-year-old, trillion-dollar North American Free Trade Agreement (NAFTA). It includes major changes on cars and new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions.

During the 2016 presidential campaign, Donald Trump promised to renegotiate NAFTA, which he called “the worst trade deal ever made.” As president, he did so. The result is the USMCA, which Trump signed into law in January and touted as one of his signature achievements in his State of the Union address.

Here’s a brief overview of what’s in it:

In June 2019, Mexico became the first country to ratify the deal. But in the US, Democrats on Capitol Hill refused to sign on to the deal without stronger enforcement of labor provisions, stricter environmental protections, and other changes.

House Democrats formed a working group to work with the administration on those demands.

In December, House Democrats announced they’d reached a revised USMCA deal with the Trump administration that included most of the updates they wanted. One big one was a “rapid-response mechanism” that calls for an independent, three-person panel of multinational, independent experts who will make sure Mexico abides by its union rules and other protections.

The revised version won the support of Richard Trumka, president of the AFL-CIO, the largest federation of labor unions in the United States, who had initially opposed the deal. Environmental groups said it didn’t go far enough, though, and some unions still opposed it.

But it was good enough to gain bipartisan support in Congress.

On December 19, the USMCA passed the House with a vote of 385 to 41. About a month later, the Senate overwhelmingly approved the USMCA, 89 to 10.

On January 29, Trump officially signed the USMCA, notching a major achievement for the president as he heads into the 2020 election.

Canada ratified the agreement in March, and the USMCA went into force on July 1, 2020. Though NAFTA is officially dead, governments and companies are still adjusting to the new rules, mostly notably the new labor provisions. The coronavirus may also complicate the implementation, as manufacturers will be adapting to new guidelines in the middle of a global economic crisis.

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