THE UNITED STATES OF AMERICA, WASHINGTON, D.C. The United States-Mexico-Canada Agreement (USMCA), which went into effect a year ago in the middle of a record economic downturn, has yet to resolve trade tensions between the North American partners. The three countries claimed that the new deal would benefit their economies and employees, but as the anniversary approaches on Thursday, the neighbors have already been embroiled in a slew of disagreements, many of which have seen the US complain to Mexican or Canadian tactics.
“Over the next several years, the majority of the focus on USMCA will be on the disputes,” said Edward Alden, a foreign policy expert at the Council on Foreign Relations.
The USMCA replaced the North American Free Trade Agreement, which had been in effect since 1994 and, according to Alden, had envisioned the continent’s three economies forming a single market at some point, similar to the European Union.
That vision appears to have died, at least for the time being.
“The USMCA essentially lays out the rules for three independent North American economies to cooperate where they can and fight where they can’t,” Alden explained.
While the countries’ disagreements have made headlines, Jeffrey Schott, a senior scholar at the Peterson Institute for International Economics, says the agreement has “lifted the cloud of uncertainty” over continental trade.
He stated, “That creates a stronger environment for trade and investment than we’ve had in a long time.”
The USMCA was negotiated by former President Donald Trump, who was notorious for his bellicose statements even against American allies, but his successor, President Joe Biden, might change policies.
However, there are indicators that the fighting will continue even under the new leadership.
READY TO FIGHT Although Canada is Washington’s closest ally, there are significant commercial disputes between the two countries.
The US has had long-standing disagreements with Canada over its dairy and softwood timber industries, as well as Ottawa’s solar panel exports and taxes of American computer enterprises.
Katherine Tai, the US Trade Representative, has stated that she will defend American interests, beginning with dairy farmers.
To Canada’s chagrin, her administration has established a dispute resolution body under the USMCA to look into the matter of milk quotas imposed by the country.
According to Francois Dumontier, a representative for an organization that represents Quebec milk farmers, the USMCA offers “no benefit.”
Some clauses, he added, are a “assault on Canadian sovereignty” since they limit Canadian exports while permitting more imports from the US.
ON THE OTHER SIDE OF THE BORDER, David Salmonsen, senior director of congressional affairs for the American Farm Bureau Federation, cited a long list of trade problems but expressed optimism.
“I believe we’ll have a better picture once everyone’s economies have recovered from the pandemic,” he said. “We backed the accord and believe it will help keep agricultural trade flowing and developing between the three countries.” In response to Washington’s 18 percent tariffs on solar panels made in Canada, Ottawa has called for its own dispute resolution panel. Despite the squabbles, Valeria Moy, general director of the Mexican Institute for Competitiveness, claimed there has been “no fundamental shift compared to NAFTA” in the past year. She does, however, believe that the USMCA will eventually reach a deal on labor reform in Mexico. USMCA has already been invoked twice by Washington to request that Mexico City investigate violations of labor rights in the automotive sector, most notably at a GM facility. “Will this be advantageous for Mexican workers? It appears that it will, in my opinion “she stated “It will compel Mexican businesses to change.” However, Moy warned that the US might use the labor situation “as an excuse to impose protectionist measures.”
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