
United States-Mexico-Canada Agreement |
NAFTA Chapters and Side Agreements |
TPP Chapters |
Side-by-Side Comparisons |
1. Initial Provisions and General Definitions | 1. Objectives | 1. Initial Provisions and General Definitions | |
2. General Definitions | |||
2. National Treatment and Market Access for Goods | 3. National Treatment and Market Access for Goods | 2. National Treatment and Market Access | |
4. Rules of Origin, with Product Specific Rules | 4. Rules of Origin | 3. Rules of Origin and Origin Procedures ) |
|
5. Origin Procedures | |||
7. Customs and Trade Facilitation | 5. Customs Procedures | 5. Customs Administration and Trade Facilitation | |
8. Recognition of the Mexican State’s Direct, Inalienable, and Imprescriptible Ownership of Hydrocarbons | 6. Energy and Basic Petrochemicals |
No equivalent |
|
9. Sanitary and Phyto-sanitary Measures | 7. Agriculture and Sanitary and Phytosanitary Measures | 7. Sanitary and Phytosanitary Measures | |
10. Trade Remedies | 8. Emergency Action: Safeguards | 6. Trade Remedies | |
11. Technical Barriers to Trade | 19. Review and Dispute Settlement in Antidumping/ Countervailing Duty Matters | ||
12. Sectoral Annexes |
No equivalent |
No equivalent |
|
15. Cross-Border Trade in Services | 12. Cross-Border Trade in Services | 10. Cross Border Trade in Services | |
19. Digital Trade |
No Equivalent |
14. Electronic Commerce | |
25. Small and Medium-Sized Enterprises |
No Equivalent |
24. Small and Medium-Sized Enterprises | |
29. Publication and Administration | 18. Publication, Notification and Administration of Laws |
No equivalent |
- Maintains duty free treatment for originating goods.
- Maintains the prohibition on export duties, taxes, and other charges.
- Maintains the MPF waiver.
- Maintains the prohibition on duty drawback.
- Prohibits (a) requiring, as a condition of importation, the use of local distributors; (b) restricting the importation of commercial goods containing cryptography; (c) import and export restrictions on remanufactured goods; and (d) requiring consular transactions and associated fees and charges.
- Adds new provisions for transparency in import licensing and export licensing procedures.
- Permits duty-free temporary admission of shipping containers or other substantial holders used in the shipment of goods for 90 days.
- Dairy market access: The US will have access to 3.6% of Canada’s dairy market, an increase from the current level of about 1%. This slightly exceeds the 3.25% market access negotiated under the TPP. In addition, Canada will eliminate its “Class 7” category (which includes milk powder and milk protein) and pricing system.
- Access for other agricultural goods: Canada will grant the US additional access to its chicken, turkey, and egg markets.
- For duty-free treatment, the regional value content of autos is set at 75% (an increase from 62.5%).
- Requires that 40-45% of auto content must be made by workers earning at least $16 per hour.
- Makes changes to certain product-specific rules of origin, such as chemicals, steel-intensive products, glass, and optical fiber.
- For example, the following compares the NAFTA and USMCA tariff-change rules of origin for chapter 70 (glass and glassware) (the highlighted portion is the rule pertaining to glass tableware):
NAFTA |
USMCA |
||
Chapter 70 Glass and Glassware | Chapter 70 Glass and Glassware | ||
70.01-70.02 |
A change to heading 70.01 through 70.02 from any other chapter. |
70.01 |
A change to heading 70.01 from any other heading. |
7002.10 |
A change to subheading 7002.10 from any other heading. | ||
7002.20 |
A change to subheading 7002.20 from any other chapter. | ||
7002.31 |
A change to subheading 7002.31 from any other heading. | ||
7002.32-7002.39 |
A change to subheading 7002.32 through 7002.39 from any other chapter. | ||
70.03-70.09(15) |
A change to heading 70.03 through 70.09 from any heading outside that group. |
70.03-70.08(12) |
A change to heading 70.03 through 70.08 from any heading outside that group, except from heading 70.09. |
7009.10-7009.91(13) |
A change to subheading 7009.10 through 7009.91 from any other heading, except from heading 70.03 through 70.08. | ||
7009.92 |
A change to subheading 7009.92 from any other subheading. | ||
70.10-70.20 |
A change to heading 70.10 through 70.20 from any other heading, except from heading 70.07 through 70.20. |
70.10-70.18 |
A change to heading 70.10 through 70.18 from any other chapter. |
70.19 |
A change to heading 70.19 from any other heading, except from heading 70.07 through 70.20. | ||
70.20 |
A change to heading 70.20 from any other chapter. | ||
(15) If the good provided for in subheadings 7007.11 or 7007.21 is for use in a motor vehicle of Chapter 87, as defined in the Appendix to this Annex, then the provisions in the Appendix to this Annex shall apply. | (12) If the good provided for in subheadings 7007.11 or 7007.21 is for use in a motor vehicle of Chapter 87, as defined in the Appendix to this Annex, then the provisions in the Appendix to this Annex shall apply. | ||
(13) If the good provided for in subheading 7009.10 is for use in a motor vehicle of Chapter 87, as defined in the Appendix to this Annex, then the provisions in the Appendix to this Annex shall apply. |
- Provides that a certification of origin need not follow a prescribed format.
- For express shipments, the de minimis threshold for duty-free and tax-free shipments is set at US$100 for the US, at US$100 for Mexico, and for Canada at C$150 (customs duties) and C$40 (taxes).
- The Parties retain their rights under the WTO Safeguards Agreement, Antidumping Agreement, and Agreement on Subsidies and Countervailing Duties.
- Maintains the existing global safeguards exclusion.
- The Parties recognize their shared concerns regarding duty evasion of antidumping, countervailing, and safeguard duties, and agree to strengthen and expand their customs and trade enforcement efforts, and strengthen their cooperation, to combat duty evasion.
- Section D replicates what was the Chapter 19 dispute settlement process in NAFTA, i.e., the binational panel review of AD/CVD determinations rather than recourse to the CIT.
- Section D clearly applies between the US and Canada, but there is some ambiguity with respect to whether it also applies to Mexico. Section D is titled: “Section D: Review and Dispute Settlement in Antidumping and Countervailing Duty Matters Between the United States and Canada.” (emphasis added) In addition, in contrast with NAFTA, the annex concerning establishing a binational panel refers only to candidates from the US and Canada.
NAFTA |
USMCA |
Annex 1901.2 Establishment of Binational Panels 1. On the date of entry into force of this Agreement, the Parties shall establish and thereafter maintain a roster of individuals to serve as panelists in disputes under this Chapter. The roster shall include judges or former judges to the fullest extent practicable. The Parties shall consult in developing the roster, which shall include at least 75 candidates. Each Party shall select at least 25 candidates, and all candidates shall be citizens of Canada, Mexico or the United States. … (emphasis added) | ANNEX 10-B.1 ESTABLISHMENT OF BINATIONAL PANELS 1. On the date of entry into force of this Agreement, the Parties shall establish and thereafter maintain a roster of individuals to serve as panelists in disputes under this Annex. The roster shall include judges or former judges to the fullest extent practicable. The Parties shall consult in developing the roster, which shall include at least 75 candidates. Each Party shall select at least 25 candidates, and all candidates shall be citizens of Canada or the United States. … (emphasis added) |
- This chapter contains provisions and sets out rights and obligations with respect to the following sectors: chemical substances, cosmetic products, information and communication technology, energy performance standards, medical devices, and pharmaceuticals.
- These annexes include provisions that promote enhanced regulatory compatibility, best regulatory practices, and increased trade among the countries.
- This Chapter applies to any measure regarding covered procurement, and applies only as between Mexico and the United States. Canada is not covered by this chapter. Government procurement between the U.S. and Canada is covered by the WTO’s Government Procurement Agreement.
- The investor-state dispute-settlement system (ISDS) will be phased out for the US and Canada over three years, but will remain for certain industries with respect to Mexico (oil and gas, power generation services, telecommunication services, transportation services, and the management of ownership of infrastructure).
- This is a new chapter. It prohibits customs duties, fees, or other charges on or in connection with the importation or exportation of digital products transmitted electronically between a person of one Party and a person of another Party.
- Parties may not prohibit or restrict the cross-border transfer of information if for business.
- Parties may not require that computing facilities be the used or located in their territory as a condition for conducting business.
- Sets the period of copyright protection for a work, performance or phonogram at 70 years after the author’s death (an increase from 50 years in Canada).
- Provides 10 years of data protection for biologic drugs (an increase from 8 years in Canada).
- This chapter addresses the activities of state-owned enterprises, state enterprises, and designated monopolies of a Party that affect or could affect trade or investment between Parties.
- This chapter addresses measures to prevent and combat bribery and corruption with respect to any matter covered by the USMCA.
- The Parties agreed to specific obligations with respect to good regulatory practices, including practices relating to the planning, design, issuance, implementation, and review of the Parties’ respective regulations.
- Each Party may still (a) pursue its public policy objectives (including health, safety, and environmental goals) at the level it considers to be appropriate; (b) determine the appropriate method of implementing its obligations within the framework of its own legal system and institutions; or (c) adopt good regulatory practices that supplement those set out in this chapter.
- Maintains the state-to-state dispute settlement process of NAFTA.
- Provides an exception for Canada’s cultural industries (including the production and distribution of written materials, film, music, and radio communications).
- If a Party intends to begin FTA negotiations with a non-market economy country, it must inform the other Parties at least 3 months prior to commencing negotiations. Thirty days prior to the release of the text of a bilateral deal with a non-market economy country, the other Parties of the USMCA have the right to review it. The other Parties can terminate the USMCA on six month notice, replacing the USMCA with a bilateral agreement.
- A new chapter on currency manipulation and misalignment practices.
- Each party “confirms” it is “bound under the Articles of Agreement of the IMF to avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.”
- Each party should “(a) achieve and maintain a market-determined exchange rate regime; (b) refrain from competitive devaluation, including through intervention in the foreign exchange market; and (c) strengthen underlying economic fundamentals, which reinforces the conditions for macroeconomic and exchange rate stability.”
- It includes several transparency and reporting provisions and establishes a “Macroeconomic Committee” to monitor implementation and “further elaboration.”
- Provides for dispute settlement procedures where a Party has “failed to carry out an obligation.”
- The Agreement terminates 16 years after its entry into force, unless each Party confirms it wishes to continue the Agreement for a new 16-year term.
- No later than the Agreement’s 6th anniversary, the Parties will conduct a “joint review” of the operation of the Agreement. Each Party shall confirm if it wishes to extend the Agreement for another 16-year period.
- If so confirmed, the Agreement shall be automatically extended for another 16 years and the Parties will conduct another joint review no later than at the end of the next 6-year period.
- The Parties shall have the ability to extend the Agreement after each joint review.
- Canada agreed that British Columbia will modify the measures identified in the US panel request (WT/DS531/7 (May 29, 2018)) and implement any changes no later than November 1, 2019.
- BC will no longer allow only BC wine to be sold on regular grocery store shelves while imported wine may be sold in grocery stores only through a so-called “store within a store.”
- The US will take no further action at the WTO in relation to the BC measures.
- The US shall not adopt or maintain a measure imposing tariffs or import restrictions on goods or services of Canada/Mexico under Section 232 for at least 60 days after imposition of a measure.
- During that 60-day period, the US and Canada/Mexico shall seek to negotiate an appropriate outcome based on industry dynamics and historical trading patterns.
- Notwithstanding the NAFTA 1994, the USMCA, and the WTO Agreement, if the US takes any 232 action inconsistent with one of those Agreements, Canada/Mexico may take a measure of equivalent commercial effect in response.
- Canada/Mexico also retains its WTO rights to challenge a Section 232 measure.
- If the US imposes a 232 measure with respect to passenger vehicles, light trucks, or auto parts, the US shall exclude from the measure:
- Canada/Mexico may have recourse to the dispute settlement procedures in Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures) of the NAFTA 1994 or the dispute settlement chapter of USMCA (whichever is in effect at the time of dispute) only with respect to whether the US has excluded the number of passenger vehicles and light trucks, and the value of auto parts as set out above, from a 232 measure.
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