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USMCA: Trump’s renegotiated push for greater North American cooperation




The US-Mexico-Canada Agreement (USMCA) came into effect from July 1 amid trade tensions among the three North American countries. To celebrate the launch of the USMCA, Mexican President Andres Manuel Lopez Obrador also visited Washington to meet US President Donald Trump earlier this month.

While AMLO faced criticism for meeting the US President in the midst of a global pandemic crisis and despite Trump’s insulting remarks against Mexico, Canadian Prime Minister Justin Trudeau decided to skip the meeting. The Canadian government cited “scheduling conflicts” for Trudeau’s decision to skip the meeting, however, the actual reasons was assumed to be the ongoing COVID-19 situation and the surging cases of infections in the United States.

Donald Trump’s one of the major goals after coming to power was to renegotiate the 25-year-old North American Free Trade Agreement (NAFTA) which he often referred to as “the worst trade deal ever made” in his statements. He claimed the NAFTA undermined US jobs and manufacturing industries. After almost two years of negotiations, the US, Canada, and Mexico agreed on signing the new agreement in November 2018, following which it took another year to get approval from Congress.

The USMCA largely retains duty-free trade and economic integration of North America as provided by the 1994 free trade agreement, along with some new provisions related to digital trade and intellectual property. However, at a time when NAFTA’s visions focused on greater cooperation among the North American countries, continental integration appears to be neglected by mutual economic dependence among the three countries in the latest trade agreement.

After the establishment of NAFTA in 1994, the US, Canada, and Mexico indulged in annual summits and high-level talks to bolster much-needed cooperation. The predominant goal of the 1994 deal was to integrate Mexico with the high-wage economies of the US and Canada.

Economists also profess that NAFTA benefitted almost all North American economies in the process. As of now, Mexico and Canada are the two biggest export markets for America, with each of the economies sending more than three-quarters of their exports to the US.

But, it is important to note that Trump administration’s “Make America Great Again” push has made it difficult to establish an integrated North America. While Trump promised a “better deal” for the US as against NAFTA, USMCA is not that much different from its predecessor. Notedly, economic experts argue that the two agreements are far more alike than they are different, therefore, the anticipated impact of the refurbished trade deal might not be that impressive.

Meanwhile, the US and Canada have agreed on extending their current border closures by one month until August 21 as the number of COVID-19 infections in America continues to rise. In a bid to ensure public safety, non-essential travel at land borders between the Us, Canada, and Mexico have been restricted until August 21.

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