The scaling back of the investor-state dispute system, a wage component to rules of origin and a more enforceable labor and environmental standard all address Democrats' complaints that free trade erodes American workers' wages and jobs and privileges corporations over citizens, said Edward Alden, a senior fellow at the Council on Foreign Relations. "The politics of this are sort of fascinating here," he said of the new U.S.-Mexico-Canada Agreement.
USMCA
The U.S.-Mexico-Canada agreement is a free trade agreement between the three countries, also known as CUSMA in Canada and T-MEC in Mexico. Replacing the North American Free Trade Agreement (NAFTA) in 2020, the agreement contains a unique sunset provision where, after six years (in 2026), any of the three parties may decide not to continue the agreement in its current form and begin a period of up to 10 years where USMCA provisions may be renegotiated.
As effusive as President Donald Trump was about the significance of his NAFTA rewrite, he was cautious about its chances of getting through Congress next year. Polls suggest Democrats could retake the majority in the House of Representatives, and there is a significant number of Democrats voted against the original NAFTA, or who pledged to vote against the Trans-Pacific Partnership. The earliest a vote could come, because of timelines laid out in fast track, would be in February. But it's likely to be later, since that doesn't include the time needed for Congress to draft implementing legislation.
Canada and the U.S. reached a deal on NAFTA 2.0 late Sept. 30, which was announced a half hour before the deadline to release the text.
The U.S.-Mexico-Canada Agreement is not a rewritten NAFTA, President Donald Trump said Oct. 1. Instead, "This one is a brand new deal," he said during a White House event. Lawyers who have begun reading the text say the treaty builds on the Trans-Pacific Partnership and the original NAFTA, while including some important new provisions. Mark Warner, a Canadian-U.S. trade lawyer, said that while Trump's speech was full of puffery, "the auto stuff is significant. I don’t think anyone should say it’s not significant."