by Mike Godfrey, Tax-News.com Washington
27 January 2020
On January 16, 2020, the US Senate voted to approve the US-Mexico-Canada Agreement, which will replace the existing North American Free Trade Agreement.
Signed by the three governments on November 30, 2018, the USMCA maintains the tariff-free market access provided for by NAFTA. However, it also introduces a range of new market access and tariff requirements for agricultural products.
Additionally, the USMCA includes a new Customs Administration and Trade Facilitation chapter, which standardizes and modernizes customs procedures throughout North America. It preserves the use of binational panels to resolve disputes on countervailing and anti-dumping matters and preserves the state-to-state dispute settlement process of the original agreement.
A number of amendments to the agreement were agreed by the three parties on December 10, 2019, in the areas of state-to-state dispute settlement, labor protection, environmental protection, intellectual property, and automotive rules of origin.
Each party must complete its respective domestic ratification procedures for USMCA to enter into force.
In the US, President Donald Trump is expected to sign the agreement in the week beginning January 20, 2020.
Mexico completed its ratification process last year, when a decree signed by President Andres Manuel Lopez Obrador was published in the nation’s Official Gazette on July 29, 2019.
Canada is expected to begin its ratification procedures in early 2020.