Canada ratified the agreement in March and the USMCA entered into force on July 1, 2020. Although NAFTA is officially dead, governments and businesses are still adapting to the new rules, especially the new labor rules. The coronavirus could also complicate implementation, as manufacturers will adapt to new guidelines in the midst of a global economic crisis. On June 19, 2019, the Senate of Mexico ratified the agreement (114 yes, 3 no, 3 abstentions). [88] Mexico`s ratification procedure will be completed when the President announces ratification in the Federal Register. The USMCA updates and replaces the 25-year-old North American Free Trade Agreement (NAFTA). Work on the new agreement lasted several years, had to be approved by both houses of Congress and required the three countries to attest to their compliance with different measures in the agreement. The certifications were finalized at the beginning of this year, which allowed the entry into force of the agreement. The USMCA rules will apply as of July 1, 2020.
Here`s a look at which sections of the USMCA impact the FDA: The USMCA will have an impact on how member countries would negotiate future free trade agreements. Article 32.10 requires USMCA countries to notify USMCA members three months in advance if they intend to enter into free trade negotiations with non-economic economies. Article 32.10 gives USMCA countries the opportunity to review any new free trade agreements that members agree to leave. It is widely speculated that Article 32.10 deliberately targets China. [56] In fact, a senior White House official said of the USMCA deal: “We were very concerned about China`s efforts to undermine the U.S. position by making deals with others.” [57] Mexican politicians saw NAFTA as a chance to accelerate and secure these hard-won reforms of the Mexican economy. In addition to trade liberalization, Mexican heads of state and government have reduced public debt, introduced a balanced budget rule, stabilized inflation and increased the country`s foreign exchange reserves. Although Mexico was hit hard by the 2008 financial crisis due to its dependence on exports to the U.S. market – the following year, Mexican exports to the U.S. fell by 17% and its economy fell by more than 6 percent – its economy recovered fairly quickly and returned to growth in 2010.
But Mexico`s NAFTA experience suffered from differences between the promises of some of its supporters — that the pact would bring rapid growth, raise wages and reduce emigration — and the outcome of the deal. Between 1993 and 2013, when Latin America experienced a major economic expansion, the Mexican economy grew at an average rate of only 1.3 percent per year. Poverty remains at the same level as in 1994. And the expected convergence of the United States and Mexican wages did not exist, with Mexico`s per capita income growing by an average of 1.2 percent per year over this period — much slower than in Latin American countries like Brazil, Chile, and Peru.
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