This bill would implement the United States-Mexico-Canada Agreement (USMCA) and replace the North American Free Trade Act (NAFTA) in governing trade between the three nations. The USMCA would reduce tariffs between the three countries, expand market access, protect intellectual property protections, promote manufacturing, and increase opportunities for small businesses. A breakdown of its various provisions can be found below.
American dairy farmers will have new export opportunities to sell products (such as milk, cream, butter, skim milk powder, cheese, and other dairy products) into Canada, which will also eliminate its tariffs on whey & margarine.
Canada would provide new access for chicken, eggs, and turkey produced in the U.S.
Canada would also eliminate a program that allows dairy products to undercut U.S. dairy sales in Canada & third country markets, and apply export charges to exports of skim milk powder, milk protein concentrates, and infant formula at volumes above an agreed threshold.
Canada would agree to grade U.S. wheat imports in the same manner it grades Canadian wheat. Grading standards for food & agricultural products between the U.S. & Mexico would be non-discriminatory.
Mexico would not restrict market access for U.S. cheeses with certain names.
All other tariffs on agricultural products traded between the U.S. and Mexico would remain at zero.
The USMCA would cover all biotechnologies, such as gene editing, and the three nations would enhance information exchange & cooperation on agricultural biotechnology trade matters.
The U.S., Mexico, and Canada would agree to not use export subsidies or World Trade Organization special agricultural safeguards for products exported to each other’s market.
The U.S., Mexico, and Canada would also agree to non-discrimination commitments regarding the sale & distribution, labeling, and certification of wine & distilled spirits (including continued recognition of Bourbon Whiskey, Tennessee Whiskey, Tequila, Mezcal, and Canadian Whiskey as distinctive products).
The USMCA would require that 75% of auto content be made in North America. This would preserve & re-shore vehicle & parts production in the U.S. and spur investment by automakers. At least 40-45% of auto content would have to be made by workers earning at least $16 per hour.
Producers autos, auto parts, and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber would be have to meet stronger rules of origin. North American parts & materials would receive preferential tariff benefits.
To promote greater use of Made-in-the-USA fibers, yarns, and fabrics, rules allowing for some use of non-NAFTA inputs in textile & apparel trade would be limited.
Additional manufacturing sectors that would be covered under new provisions in the USMCA include information & communication technology, pharmaceuticals, medical devices, cosmetic products, and chemical substances.
Mexico would have to take legislative actions to provide for the effective recognition of the right to collective bargaining for workers.
A U.S.-Mexico Rapid Response Mechanism would be established to provide for monitoring & expedited enforcement of labor rights under Mexico’s landmark labor reform while respecting sovereignty & due process.
An Interagency Labor Committee will actively monitor Mexico’s compliance with labor requirements and report to Congress on them.
Full national treatment would be required for copyright & related rights, so U.S. creators will have the same protections domestic creators receive in a foreign market.
Patentability standards & patent office best practices would ensure that U.S. innovators, including small- and medium-sized businesses and pharmaceutical & agricultural innovators are able to protect inventions through patents.
A minimum copyright term of life of the author plus 70 years (or 75 years after first publication) would be required.
Standards would be established to prevent circumvention of technological protection measures that protect digital music, movies, and books.
Customs duties & other discriminatory measures couldn’t be applied to digital products distributed electronically, such as e-books, videos, music, software, or games.
Law enforcement would have authority to stop suspected counterfeit or pirated goods at every phase of entering, exiting, and transiting through the territory or any party.
Civil & criminal penalties would be established for satellite & cable signal theft.
Broad protections would be established against trade secret theft, including against state-owned enterprises.
U.S. financial service suppliers would receive the same treatment as local suppliers under most-favored-nation treatment. Market access restrictions would be prohibited.
ENVIRONMENT MONITORING & ENFORCEMENT
Harmful fisheries subsidies that benefit vessels or operators involved in illegal, unreported, and unregulated (IUU) fishing would be prohibited. Customs inspections at ports of entry would be enhanced to ensure strong enforcement against IUU fishing.
New protections would be established for marine species like whales & sea turtles, while shark-finning would be prohibited.
New provisions would be established to improve air quality, prevent & reduce marine litter, support sustainable forest management, and ensure appropriate procedures for environmental impact assessments.
The U.S. & Mexico would participate in a separate Environment Cooperation & Customs Verification Agreement to combat trade in illegally taken wildlife, fish, and timber.
SMALL & MEDIUM ENTERPRISES
The USMCA would include a first-ever chapter on small- and medium-enterprises (SMEs). It would establish information sharing tools to help SMEs understand the benefits of the USMCA and a SME committee comprised of officials from each country.
Rules regarding paperwork, duties, and taxes for express shipments between the U.S., Mexico, and Canada would be reduced to lower burdens on small shipments.
Local presence requirements for cross-border service providers would be eliminated, thus enabling SMEs to avoid the unnecessary burden of opening a foreign office in order to do business.
The USMCA couldn’t be used to amend, modify, or invalidate any U.S. federal law or state law.
The president or other appropriate U.S. government officials would be authorized to make certain proclamations, put forward regulations, or make changes to tariffs in advance of the USMCA taking effect.
The USMCA will enter into force at least 30 days after the president submits a written certification to Congress that Mexico & Canada will have taken the necessary steps to implement the USMCA on the date specified by the president.
Tariffs and duties would be eliminated on goods that originate from USMCA countries unless otherwise specified.
If a trade dispute between the parties to the USMCA arises, the formation of a dispute settlement panel would be required.