New Us Trade Agreement With Mexico

On June 19, 2019, the Mexican Senate ratified the agreement (114 yes, 3 no, 3 abstentions). [88] Mexico`s ratification process will be completed when the President announces its ratification to the Federal Register. Mexican politicians saw NAFTA as an opportunity to accelerate and block these hard-hit reforms in the Mexican economy. In addition to trade liberalization, Mexican leaders have reduced public debt, introduced a balanced budget rule, stabilized inflation and built up the country`s foreign exchange reserves. Although Mexico was hit hard by the 2008 financial crisis because of its dependence on exports to the U.S. market – the following year, Mexican exports to the United States fell by 17% and its economy fell by more than 6% – its economy rebounded fairly quickly and returned to growth in 2010. For the first time, a trade agreement requires this: the agreement between the United States – Mexico – Canada (USMCA) is a trade agreement between these parties. The USMCA replaced the North American Free Trade Agreement (NAFTA). The full text of the agreement between the United States, Mexico and Canada is available here. The formal negotiation process began on May 18, 2017, when the USTR announced to Congress that it wanted to renegotiate NAFTA starting at 90 days. [33] In accordance with the trade promotion authority`s statutes, the USTR published its document on the main objectives of the negotiations on 7 July 2017. Negotiations began on August 16, 2017 and continued until April 8, 2018.

Without a solution, Lighthizer said on May 2, 2018, that negotiations would be suspended until 2019 until 2019 if no agreement was reached at the end of the month. This statement was justified by the impending change of government in Mexico, during which the then President, Andres Manuel Lopez Obrador, did not agree with much of the negotiated language and was perhaps unwilling to sign the agreement. During his 2016 election campaign and presidency, Trump sharply criticized NAFTA (it was often called “perhaps the worst trade deal of all time” [105] and hailed the USMCA as “an excellent deal for all of us.” [106] However, the USMCA is very similar to nafta, has adopted many identical provisions and has made only modest changes, mostly cosmetic,[107] and is expected to have only a limited economic impact. [108] Former U.S. Trade Representative Mickey Kantor, who oversaw the signing of NAFTA during Bill Clinton`s administration, said, “This is really NAFTA of origin.” [109] The renegotiated agreement contains a chapter on macroeconomic policies and exchange rate issues, with new political and transparent monetary commitments. The chapter will address unfair monetary practices by requiring high-level commitments to avoid any devaluation of competition and to target exchange rates, while significantly increasing transparency and providing accountability mechanisms.


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