USMCA Celebrates 1 Year
This July marked the one-year anniversary of the United States – Mexico – Canada Agreement (USMCA), which entered into force on July 1, 2020. USMCA updated the 25-year-old North American Free Trade Agreement (NAFTA), which formed the largest trading block in the world. Regional trade increased from around $290 billion to well over $1 trillion during NAFTA.
The Tri-Lateral Hamburger
How interconnected are our North American economies? It’s quite possible your next hamburger will feature beef from Alberta processed in North Carolina, on bread baked in Mexico City containing Canadian wheat, with tomatoes from Mexico and lettuce from California.
USMCA updates, modernizes, and rebalances the NAFTA to meet the challenges of the 21st century economy. Agriculture, Digital Trade, Environment, Intellectual Property, and Labor were a few of the updated chapters within USMCA.
For the first time in a US free trade agreement, the USMCA includes a Stand-Alone Chapter on Small to Medium Sized Businesses. Increased de minimis levels, reduced red tape for low-value shipments, elimination of local presence requirements for cross-border service providers, and policies to promote participation by small businesses in government procurement are a few of the changes for small to medium sized businesses.
Canada’s proximity, similar marketplace, low barriers of entry, often make the country one of the first markets to develop for Maine businesses. Canada is by far Maine’s largest trading partner, representing over 50% of Maine’s exports and imports. Maine exports more to Canada than the next 100 countries combined. Maine’s combined exports to Canada and Mexico were $1.3 billion in 2020.
Happy birthday, USMCA.
For more information, contact MITC Canada Desk Director and Senior Trade Specialist Jeff Bennett.