Changes are on the rise for the nearly 25-year-old North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada. These three countries met and negotiated a last-minute agreement, which revised and could ultimately replace, NAFTA. This new agreement would be called USMCA, standing for the United States-Mexico-Canada Agreement. President Donald Trump, Prime Minister Justin Trudeau, and President Enrique Pena Nieto are expected to sign the deal by the end of November, when it will then be passed to Congress to approve. Read below for a brief summary of USMCA negotiation terms.
New Negotiating Terms
Under NAFTA, Canada is currently limited on how much milk, cheese, and other dairy products can come from the United States. Under the new proposed agreement, Canada agreed to open up its market to allow U.S. farmers to export more dairy products. In exchange, the U.S. will allow more Canadian dairy, peanuts, and a limited supply of sugar to cross the border.
In order for cars to be free from tariffs, it was agreed upon that 75% of vehicle parts will be manufactured in North America, which is about 12% higher than under the current agreement, NAFTA. The goal is to bring back some production that has moved abroad.
Should I Stay Or Should I Go?
The U.S. was originally in favor of ending USMCA after five years, unless the three countries agreed to renew it. However, Mexico and Canada feared that decision might impede investment in their countries if the agreement was ever in question. New negotiations state the agreement will be effective for 16 years, unless the countries decide to renew it. They must meet every six years to decide if the deadline should be extended.
If any of the countries violate the agreement, there are rules set in place from NAFTA which hold the nations accountable. Only one provision will change: Chapter 11 will be removed between the U.S. and Canada however, it will remain for key issues which relate to infrastructure and telecommunications between the U.S. and Mexico. Two other rules will remain unchanged.
The new trade agreement requires 40 to 45% of car and truck parts be made by workers earning at least $16 an hour. The goal is to even the playing field between the United States and Mexico and incentivize manufacturers to build more in the U.S. Moreover, 75% of vehicle parts must now be made in North America, up from the 62.5% rule in NAFTA.
With technological advances in the past two decades, the new agreement addresses new criminal penalties for pirating movies online. Now law enforcement can stop suspected counterfeit or pirated goods in any of the three countries.
To research NAFTA in HeinOnline, users can use several different avenues. Begin by entering the Law Journal Library. Enter NAFTA into the Full Text tab and click the search button. Let’s focus on the topic of dispute resolution. From the results page, expand the Topic facet and choose Dispute resolution. Then Sort by Number of Times Cited by Articles.
Relevant articles include:
- Do BITs Really Work?: An Evaluation of Bilateral Investment Treaties and Their Grand Bargain
- The Importance of Bilateral Investment Treaties (BITs) When Investing in Emerging Markets
- The New Face of Investment Arbitration: NAFTA Chapter 11
- The Nafta Investment Chapter and Foreign Direct Investment in Mexico: A Third World Perspective
Now, let’s run a proximity search to locate information about NAFTA regarding Canada and dairy products. Using the Full Text tab, enter “Canada NAFTA dairy”~20 and click the search button.
To find what has been recently published on this topic, choose Volume Date (Newest First) from the Sort by option on the results page.
Recent articles include:
- The Risks and Rewards of Renegotiating the North American Trade Relationship
- Getting the “Message” on Free Trade: Globalization, Jobs and the World According to Trump
- Lessons About NAFTA Renegotiations from Shakespeare’s Othello: From the Three Amigos to America as Iago?
- Trump’s New Trade Policy: Concepts, Agendas and Constraints
Next, let’s take a look at the U.S. International Trade Library. In this database, run a search for NAFTA using the Full Text tab. From the results page expand the USITC Category from the facets on the left and choose NAFTA.
Users can research the history of NAFTA with the following documents:
- The Impact of the North American Free Trade Agreement on the U.S. Economy and Industries: A Three-Year Review
- Potential Impact on the U.S. Economy and Selected Industries of the North American Free-Trade Agreement
- Probably Economic Effect of Certain Modifications to the North American Free Trade Agreement Rules of Origin
Lastly, using the Catalog tab, enter the word NAFTA into the search bar.
This returns results for all the titles in HeinOnline that contain the word NAFTA. Some useful resources include
- NAFTA Handbook
- NAFTA and Motor Vehicle Trade
- The NAFTA: Report on Environmental Issues
- The North American Free Trade Agreement (NAFTA) and U.S. Agriculture
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