New Nafta Agreement 2019

By August 13, 2023 Uncategorized

The New NAFTA Agreement 2019: Understanding the Key Changes and their Implications

On November 30, 2018, the United States, Mexico, and Canada signed a new trade agreement, officially known as the United States-Mexico-Canada Agreement (USMCA). The USMCA, which replaces the previous North American Free Trade Agreement (NAFTA), is considered by many as a significant milestone in North American trade relations. This article aims to provide a comprehensive overview of the new NAFTA agreement in 2019, highlighting the key changes and their implications.

1. Automotive Industry Rules of Origin

One of the most significant changes in the USMCA is the new rules of origin for automobiles. The new agreement requires that 75% of the value of a vehicle must be produced in North America, up from 62.5% under NAFTA. Additionally, 40-45% of the vehicle must be produced by workers earning at least $16 an hour. The new rules aim to incentivize the production of higher-wage jobs in North America, particularly in the United States.

2. Intellectual Property Rights and Digital Trade

The USMCA also includes new provisions on intellectual property rights and digital trade. The agreement extends the copyright protection from 50 to 70 years, bringing it in line with international standards. It also includes provisions on data localization, prohibiting governments from mandating data storage in a specific location. Additionally, the USMCA includes provisions on e-commerce, prohibiting customs duties on digital products and services, and ensuring the free flow of data across borders.

3. Agricultural Products and Dairy

The USMCA provides new access to the Canadian dairy market for U.S. farmers. The agreement also includes new provisions on agricultural trade, including the elimination of some tariffs on processed agricultural products.

4. Dispute Resolution and Sunset Clause

The USMCA includes a new dispute-resolution mechanism that aims to streamline the dispute settlement process and make it more efficient. The agreement also includes a sunset clause, which requires the three countries to review the deal every six years and decide whether to renew it. The sunset clause provides an opportunity for the three countries to assess the effectiveness of the agreement and make changes as needed.


The USMCA agreement has implications for the three countries involved and the broader global trade system. The new rules of origin for automobiles, intellectual property rights, and digital trade provisions, and agricultural provisions are likely to have a significant impact on trade relations within North America. The new agreement will also shape the future of trade agreements globally, particularly in disputes resolution and sunset clauses.

Overall, the USMCA is a significant achievement for North American trade relations, with the potential to create new opportunities for economic growth and job creation. However, it remains to be seen how the new agreement will be implemented and whether it will achieve its intended goals. Nonetheless, the USMCA represents a significant milestone in the evolution of North American trade relations and the global trade system.