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  1. Negotiations

USMCA


The US-Mexico-Canada Agreement (USMCA, or CUSMA in Canada) is a comprehensive free trade and investment agreement between Canada, Mexico and the USA. It came into force on 1 July 2020. It replaced the then groundbreaking North American Free Trade Agreement (NAFTA) which took effect on 1 January 1994.

NAFTA was an expansion of the 1989 Canada-US Trade Agreement (CUSTA) and was seen as a landmark in setting higher standards in a range of areas, including agriculture, investment, intellectual property, and services.

Dubbed a “death sentence” for Mexico’s campesinos and Indigenous Peoples, NAFTA sparked strong and sustained people’s resistance in Mexico, including the Zapatista uprising. Since taking effect, cheap, subsidized US corn has flooded the market, priced below the cost of production, with which campesinos cannot compete.

Almost two million jobs were lost in Mexico’s agriculture sector in NAFTA’s first ten years. This has led to massive displacement, poverty, and hunger.

NAFTA’s Investor-State Dispute Settlement (ISDS) mechanism - in which an investor from one signatory country can sue the government of another signatory country for actions or omissions which it claims to interfere with its right to make a profit - raised concerns about the way in which the agreement furthered the interests of transnational corporations, and limited the capacity of governments to regulate the economy for social, environmental or other reasons.

The ISDS mechanism has taken a toll on Mexico and Canada, which have been sued respectively 20 times and 27 times, mostly by US investors.

NAFTA was also criticized for boosting low wage and working conditions jobs, especially along the US-Mexico border, where over 3,000 maquiladoras employ over a million Mexicans, mostly women who earn about US$5 a day.

On 1 January 2008, the last agricultural tariffs were eliminated under NAFTA and small farm organizations in Mexico declared “all-out war” on the trade agreement, arguing that the country’s food sovereignty and security are in peril. Massive peasant demonstrations against NAFTA were held throughout Mexico in early 2008.

The 2016 Trump presidential campaign called for NAFTA’s termination. But instead, the new US administration decided to tweak the deal and started the renegotiation process in May 2017.

The USMCA was signed on 30 November 2018, after the US clinched separate deals with Canada and Mexico. Mexico ratified the agreement in June 2019. Ratification is pending in Canada, but stalled in the US, due to concerns of the Democrat-controlled House of Representatives over workers rights, the environment and issues related to pharmaceuticals.

The USMCA has been criticized for going even further towards trade liberalization than NAFTA. Small farmers’ organizations say that it will privilege large agribusiness corporations over family farmers and the environment (including climate change). Public information about chemicals used in agriculture and food labeling will also be limited. In May 2017, many groups met in Mexico City and called for a new model of integration, cooperation and exchange among nations that respects human, political, economic, social, cultural and environmental rights.

The new NAFTA follows the US-proposed language on intellectual property and e-commerce in the Trans-Pacific Partnership (TPP) – now Comprehensive and Progressive TPP without the US. It will force Mexico to join the UPOV91 Convention - plant variety protection patent-like rules which prevent farmers from saving and exchanging seeds. It also restricts data localization policies and bans restrictions on data transfers across borders, procedures that can be used to keep sensitive personal information, such as health data, within local jurisdictions. The deal originally provided a minimum of 10 years of marketing exclusivity for cutting-edge biologic medicines, which include many new cancer treatments and even vaccines, beyond the 20 years of patent protection stated in TRIPs (Trade-Related aspects of Intellectual Property rights) standards but the provision was removed eventually.

Negotiators claim to have secured sweeping progress on labour protection However, no clear enforcement mechanism is set down so these are little more than voluntary guidelines.

The ISDS mechanism between the US and Canada, and between Mexico and Canada has been removed – even though it is included in the TPP, to which both countries belong. New procedures replace the ISDS between the US and Mexico. Expansive rights for investors are mostly terminated. Only limited claims are allowed after exhaustion of local remedies. But the ISDS mechanism has been maintained between the two countries for claims pertaining to Mexico’s oil and gas sector.

The text of the agreement: https://www.bilaterals.org/?united-states-mexico-canada

last update: August 2021
Photo: Jim Winstead/CC BY 2.0

US launches probe into Mexican sugar imports as mills reject claims
21-Apr-2014     Reuters
The US government launched on Friday a probe into allegations that cheap imports of Mexican sugar are causing nearly $1 billion in damages in the local market, even as the Mexican representatives made a formal rebuttal of the accusations.
Mexico: NAFTA has not created jobs for us
15-Mar-2014     El Sol de Tijuana
Dr Robert A. Blecker, a researcher of the Economics Department at the American University in Washington admitted that the North American Free Trade Agreement has not led to economic growth, much less to job creation in Mexico.
NAFTA partners pushing North American competitiveness integration agenda
4-Mar-2014     Be Your Own Leader
The growing domestic and international opposition to the secret trade talks have put the Globalists plan to use the TPP to upgrade and expand NAFTA to more countries in serious jeopardy.
NAFTA and the next phase of North American integration
14-Feb-2014     Be Your Own Leader
On the heels of its 20th anniversary, there once again appears to be renewed interest in broadening and deepening the NAFTA partnership as part of the next phase of North American integration.
NAFTA & environmental laws: Ethyl Corp. v. Government of Canada
30-Jan-2014     Global Policy Forum
Chemical firm uses trade pact to contest Environmental Law
US lays out goals for North American Free Trade Agreement
16-Jan-2014     The Star
Twenty years after NAFTA began remapping the North American economy, the US wants a sequel.
The Guardian: Mexico would be better off without NAFTA
6-Jan-2014     Sexenio
In an extensive report on “20 years on from the Signing of the North American Free Trade Agreement (NAFTA)”, the British newspaper, the Guardian, has claimed that Mexico could have maintained economic growth that it sustained between 1960 and 1980 without the need for an agreement.
Mexico farmers warn of year of protests
5-Jan-2014     Press TV
Mexican peasant organizations have warned of a year of protests unless the federal government fulfills its promise to end the disastrous effects generated by the North American Free Trade Agreement (NAFTA).
Zapatista uprising 20 years later: How Indigenous Mexicans stood up against NAFTA "death sentence"
5-Jan-2014     Democracy Now!
On the same day the North American Free Trade Agreement went into effect on Jan. 1, 1994, the Zapatista National Liberation Army and people of Chiapas declared war on the Mexican government, saying that NAFTA meant death to indigenous peoples. To learn about the impact of the uprising 20 years later and the challenges they continue to face, DN! speak with Peter Rosset, professor of rural social movements in San Cristóbal de las Casas, Mexico.
How NAFTA helped the Mexican billionaires' club
5-Jan-2014     NPR
When the North American Free Trade Agreement was being negotiated, supporters promised it would increase the income of Mexicans. Two decades later, it's clear that Mexico's ultrarich are among its big winners.