USMCA

USMCA

created one of world’s largest free trade zones, w population of more than 510mil ppl

economy of $30.997tril in nominal GDP - nearly 30% of global economy

What is a free trade area

• region which several countries sign free trade agreement & maintain little to no barriers to trade

Advantages of free trade area

• greater access to low priced, high qual goods, greater efficiency, innovation, increased ec dev, living standards

Disadvantages of free trade area

• cause jobs to migrate to country where COP lower

• harm growth of nascent industries that r just beginning to develop, economy too dependent

• reduced environmental standards

Important Provision of USMCA

‘mutually beneficial win for Northern American workers, farmers, ranchers and business’

aimed to create free trade zone - basis for new agreement

broad impact on trade of all kinds between nations

Main provisions include:

• dairy and agriculture - USMCA will increase US farmers access to Canadian dairy

• automobiles - 75% of automobile parts must be manufactured in USMC for sale to be tariff free & stipulate min wage

• labour - can investigate factories accused of violating workers’ rights

• sunset provision - USMCA set to expire after 16 yrs unless renewed