US Trade Update: USMCA Signed

​Chris Sevcik, Director of International Trade Services, WTCGP

​President Trump signed the USMCA today.  The USMCA aims to build on NAFTA by strengthening the alliance and ensuring all parties benefit.  Mexico has already ratified the agreement.  Canada, long insisting it would wait for US approval before proceeding, still must ratify the new agreement and then Canada, Mexico and the US must meet their obligations before the deal takes effect. 

The US International Trade Commission estimates that “USMCA would raise U.S. GDP by $68.2B and us employment by 176,000 jobs.”  They go on to state that “US exports to Canada and Mexico would increase by $19.1B (5.9%) and $14.2B (6.7%), respectively.”  This projected increase in GDP and jobs for Americans allowed for the Senate to pass the bill overwhelmingly with an 89-10 vote.
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Major areas of change:

• Increases to 75% from 62.5% auto components need to have originated in North America
• Requires 70% of car’s steel and aluminum to be made in North America
• 40%-45% of vehicle content must come from areas paying more than $16 an hour
• Updates the rules of origin and origin procedures
• Prohibits duties on digital products
• Limits data localization requirements
• Creates a new informal shipment level of 2.500 to reduce paperwork on SMEs
• Market access gains for American dairy products

Approved with bi-partisan support, USMCA will benefit companies across North America, create jobs and boost GDPs.