NORTH AMERICA
New trade agreement between Canada, Mexico and the US enters into force in July / EU concludes trade deal with Mexico
The US-Mexico-Canada (USMCA) trade agreement will enter into force 1 July 2020 now that the US became the third country to notify the other parties it had completed its domestic procedures to implement the new agreement. US trade representative Robert Lighthizer in April 2020 notified US congress that Canada and Mexico had taken the necessary measures to comply with their commitments under the agreement.

The new USMCA trade deal will be in effect this summer (Photo: PantherMedia/frizio)
“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,” added Lighthizer. President Donald Trump signed USMCA into law in January 2020, with Canada the last of the three to ratify the trade deal in March.

The new agreement will supersede the 26-year-old NAFTA when it comes into force. USMCA, known as “T-MEC” in Mexico, “CUMSA” in English-speaking Canada and “ACEUM” in French-speaking Canada, contains significant improvements and modernised approaches to rules of origin, agricultural market access, intellectual property, digital trade, financial services, labour and numerous other sectors. The trade deal presents major changes to non-US-based automotive manufacturers and suppliers with facilities in North America (see Plasteurope.com of 12.12.2019).

A 2019 report from the US International Trade Commission (ITC, Washington, D.C.; www.usitc.gov), “United States-Mexico-Canada Agreement: Likely Impact on The U.S. Economy and Specific Industry Sectors” estimates the agreement would raise US exports to Canada by USD 19.1 bn or 5.9%, while US exports to Mexico would increase by USD 14.2 bn or 6.7%. Imports from Canada to the US would rise by USD 19.1 bn or 4.8%, while imports from Mexico would increase by USD 12.4 bn or 3.8%. Manufacturing is expected to experience the largest percentage gains in output, exports, wages and employment, while in absolute terms, services would experience the largest gains in output and employment, according to the report. Overall US GDP would climb by USD 68.2 bn or 0.35%, and jobs would increase by 176,000, said the report.

The Plastics Industry Association (Plastics, Washington, D.C.; www.plasticsindustry.org), the Canadian Plastics Industry Association (CPIA, Mississauga, Ontario; www.plastics.ca) and the Asociación Nacional de Industrias del Plástico (Anipac, Mexico City; www.anipac.com) voiced support for the new trade deal (see Plasteurope.com of 25.10.2019).

Trade relations between the US and Brazil are also under discussion. The countries agreed to accelerate ongoing trade talks under the Brazil-US commission on economic and trade relations (ATEC), aiming to conclude in 2020 a deal on trade rules and transparency, including trade facilitation and good regulatory practices.
European Union concludes trade deal with Mexico
At the end of April, the EU concluded its own trade deal with Mexico. Under the new EU-Mexico agreement, practically all trade in goods between the two regions will be duty-free. Mexico is the EU’s top trade partner in Latin America, according to the European Commission, with bilateral trade in goods at a value of around EUR 66 bn in 2019 and trade in services worth EUR 19 bn in 2018. EU goods exported annually to Mexico exceed EUR 39 bn.

Once the revision of the deal is finalised, the agreement will be translated into all EU languages and the commission proposal will then be transmitted to the European Council and European Parliament. The EU and Mexico started negotiations for this new trade deal in May 2016.
15.05.2020 Plasteurope.com [245041-0]
Published on 15.05.2020
Freihandel: USMCA ab 1. Juli in Kraft, EU mit eigenem Mexiko-PaktGerman version of this article...

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