USMCA Trade Deal To Come Into Effect On July 1

The new free trade deal between the United States, Mexico and Canada will enter into force on July 1, the office of the US trade representative said Friday.

The pact -- which replaces the 1994 North American Free Trade Agreement (NAFTA) -- binds nearly half a billion consumers in a single market.

The entry into force of the agreement "marks the beginning of a historic new chapter for North American trade," the USTR said.

The United States-Mexico-Canada Agreement (USMCA) -- as Washington calls it -- came into being when President Donald Trump forced Canada and Mexico to the negotiating table, threatening to scrap NAFTA outright unless it was revamped.

Trump had long targeted NAFTA, which he said had resulted in sending US jobs abroad.

At the end of marathon talks, the three parties signed the initial version of the deal in November 2018.

Democrats in Congress, who hold the majority in the House of Representatives, demanded a few amendments.

Mexico ratified it in December 2019, Trump signed it into law in January, and Canada's parliament adopted it in March.

The USMCA changes rules on auto manufacturing to boost US jobs and requires higher salaries for some Mexican auto workers.

It also makes changes to e-commerce, intellectual property protections and dispute settlement for investors, as well as imposing tougher labour provisions, requiring reforms to Mexico's laws.

USTR said the deal would "deliver more jobs, provide stronger labor protections and expand market access, creating new opportunities for American workers, farmers and ranchers."

US Trade Representative Robert Lighthizer, who led Trump's negotiating team, said: "The crisis and recovery from the Covid-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America."

He called the entry into force of the trade deal a "landmark achievement in that effort." (AFP)