Politics of USMCA

Hello, everyone. This audio brief on the new NAFTA or US-Mexico-Canada Agreement is

brought to you by the Global Research Institute of International Trade or GRIIT. I am Dr. Sarita

Jackson the president and CEO of GRIIT. Canada has joined the United States and Mexico in a

trilateral trade deal referred to as USMCA. I am scheduled to discuss with business executives

the differences between NAFTA and USMCA. Some of the key differences will be shared here.

Also, I will share with you a few things to watch out for from a political perspective.

Three areas where there have been a shift is in dairy, automobiles, and pharmaceuticals. Under

the revised agreement, U.S. dairy farmers have increased access to the Canadian market. In

addition, the regional content requirement for automobiles has gone up from 62.5% to 75%.

And the protection period for a class of drugs known as biologics has increased from 8 years in

Canada and 5 years in Mexico to 10 years for both countries. This protection is against lower

cost generic drugs. Biologics are expensive drugs on the market that treat diseases such as

different forms of cancers, arthritis, and multiple sclerosis.

Despite the USMCA, the U.S. tariffs on steel and aluminum remain in place even for Canada and

Mexico.

The complete text of the agreement for additional details can be found on the Office of U.S.

Trade Representatives website at ustr.gov.

So where is the USMCA now?

Recently challenges have arisen within the last week. U.S. President Donald Trump has

threatened the USMCA over the current caravan of migrants from Central American countries

and Mexico trying to reach the United States. Additionally, Mexico’s deputy commerce minister

Juan Carlos Baker has stated that Mexico will not sign the deal unless the United States

removes its 25 percent tariffs on steel and 10 percent levy on aluminum.

The USMCA has political implications. It appears as if the deal is being used as leverage to

accomplish other goals as pertains to U.S. immigration policy.

On the economic side, some have argued that the USMCA will not have any significant impact

on economic and job growth in the United States or in terms of narrowing the trade deficit with

Mexico.

From my standpoint, considering earlier talks of a U.S. withdrawal from NAFTA, we are at a

good point in that North American trade remains intact by moving forward with a revised

NAFTA deal.

The next step is to have the agreement signed by November 29th or 30th, possibly at the G20

summit in Buenos Aires, Argentina. This deadline is right before the Mexican President elect
Andres Manuel Lopez Obrador takes office on December 1st. The USMCA would still have to be

ratified by all three countries.

To keep this conversation going, I would love to hear from you as to what you think about the

USMCA or any questions that you may have.

Thanks for listening. This is Dr. Sarita Jackson sharing insight about USMCA on behalf of the

Global Research Institute of International Trade.