USMCA continues to allow the free flow of trade across North American borders of the three countries
WASHINGTON, D.C. (AP) - After months of political wrangling, House Democrats agreed Tuesday, Dec. 10, to President Donald Trump’s revamped version of a 25-year-old North American Free Trade Agreement (NAFTA).
The recent announcement probably clears the way for congressional approval of Trump’s U.S.-Mexico-Canada Agreement (USMCA), though pockets of resistance remain, and powerful business lobbies said they still needed to study the details of the latest version. More than anything, though, USMCA would just restore certainty to $1.4 trillion worth of annual trade between the three countries more than two years after Trump began negotiations on a new regional trade pact.
The pact is Trump’s replacement for the North American Free Trade Agreement, which took effect in 1994. NAFTA slashed tariffs and tore down most trade barriers between the United States, Canada and Mexico, unleashing a burst of trade between the three countries. “The intrinsic importance of the deal is not what it does to modernize NAFTA but rather what it prevents: a potentially disastrous breakdown of trade between the U.S. and its most important trading partners,” Gregory Daco, chief U.S. economist at Oxford Economics, wrote in a research note.