The United States Mexico Canada Agreement (USMCA) is an updated version of the North American Free Trade Agreement signed in 1994, which governed more than $1.2 trillion worth of trade among the three nations. The fundamental changes in the renegotiated pact are primarily centered around intellectual property and data, and stricter environmental and labor protections. A clear component of the new deal is to make it more difficult for companies to move their factories to Mexico, where costs are much cheaper.
There are significant opportunities associated with the changes in the pact for many parties involved. Amidst impeachment hearings, the Democrats and President Trump have reached an agreement that benefits both parties, boosting the US economy, creating an expected new 176,000 jobs, and providing President Trump with momentum in his trade war with China. In addition, the trade agreement provides stability for investors in the midst of emerging trade conflicts. Canadians are also expected to benefit from the deal. Mexico had to concede the most in negotiations, but it strengthens US-Mexico ties and protects the nation from being hit by tariffs.
