Frequently Asked Questions
United States, Mexico, Canada Agreement.
It’s a brand-new trade deal that will replace NAFTA—North American Free Trade Agreement.
NAFTA took effect 25 years ago and was negotiated during a time when the economy looked much different than it does today. USMCA will replace out-of-date provisions of NAFTA with a new deal that is tailored to put America first in a modern economy.
When USMCA becomes law, American workers and consumers will be the main beneficiaries of the USMCA. This deal would provide U.S. employers with tariff-free access to sell U.S. products in Mexico and Canada while protecting American jobs from outsourcing.
USMCA has been agreed to by the leading negotiators from the U.S., Mexico, and Canada. Soon the deal will be sent to Congress in the form of legislative text. When Congress passes the bill by a simple majority and it is signed by the President, USMCA will officially replace NAFTA.
Under the newly negotiated structure of USMCA, the agreement must be reviewed and renewed by all the participating countries every six years. This means that the U.S. will have a chance to review aspects of the deal in real time and make periodic adjustments as necessary. This was not the case under NAFTA which was open-ended and partially permanent.
USMCA puts new standards in place that stop Mexico from undercutting America workers. These wage and employment standards will discourage outsourcing and keep American jobs here. At the same time, the deal opens markets to more exports of U.S. manufacturing. This will help build on the 475,000 manufacturing jobs that have been added since January 2017.
U.S. automobile workers are some of the biggest winners under the USMCA. The agreement protects American auto workers by requiring more car parts to come from North America. In addition, the bill requires that at least 40% of automobiles must be made by people earning at least $16 an hour. This provision stops Mexico from paying substandard wages for manufacturing and undercutting American workers.
Under current law, patents for innovative drugs receive eight years of market exclusivity within the countries that are party to the agreement. The USMCA provides ten years of patent protections for cutting-edge biologic drugs so American scientists are incentivized to find more cures without fear of countries stealing their intellectual property.
Failure to pass the USMCA in Congress could result in a withdraw from NAFTA without a better replacement. That would have immediate and devastating economic consequences. America’s supply chain would be severely disrupted which would result in cost increases for consumers. The price of almost all commercial goods—apparel, food, cars and medical devices—would steeply increase. Jobs would be lost as export markets shrink and our nation’s economic growth would be put in serious jeopardy for generations.
In addition to labor and market access agreements, the deal has strict rules against bribery and other types of corruption. Each party to the agreement is strictly required to enforce labor agreements delineated under the USMCA. The agreement allows any country to bring forth a claim to a neutral arbitrator if they believe a provision of the deal has been violated. All parties are subject to the decision of that dispute settlement mediation. As a failsafe, the entire USMCA is reviewed for renewal every six years, which incentivizes participating countries to obey the rules.