The US-Mexico-Canada Agreement (USMCA) reached the next level of approval with a nod from the House working group established by Nancy Pelosi. The agreement is supposed to hit the chamber floor next week, and the White House intends to send a final implementing bill to Congress soon. The recently-amended deal contains rules surrounding intellectual property and data, labor, and environmental protections.
The most recently-released text for the NAFTA replacement was published in May on the website of the US Trade Representative, and the latest text accepted by the three countries isn’t available yet.
Highlights of USMCA include:
- Cars or trucks must have 75% of its parts manufactured in Canada, Mexico, or the US—up from 62.5% found in NAFTA.
- At least 30% of the workers building USMCA-eligible vehicles must make at least $16 an hour, which gradually moves to 40% by 2023.
- The US will not place tariffs on car and vehicle parts coming from Canada and Mexico.
- Mexico will need to make it easier for workers to unionize; the US may deny goods from factories who violate workers’ rights.
- US farmers will be able to sell more dairy products to Canada, which includes milk, milk powder, butter, and ice cream.
- USMCA must be reviewed after six years; if all parties agree, the deal will continue for the duration of the 16-year term.
- The dispute process allowing the three countries to challenge anti-dumping and countervailing duties remains in place.
Deringer will continue to follow USMCA developments and will advise clients how the deal will impact their entries. For additional information, contact Deringer’s Compliance Department.
