Regional Trade Integration: United States

The United States has sought to deepen regional trade integration in a variety of ways across all areas of the manufacturing sector.

These include the negotiation of the Mexico-United States-Canada Agreement (USMCA, which includes new rules of origin for the automotive sector aimed at increasing regional content and benefiting the North American auto industry.

Other examples include the Indo-Pacific Economic Framework for Prosperity (IPEF) and the U.S.-EU Trade and Technology Council (TTC), both of which focus on developing more secure, diverse and resilient regional supply chains.

For the first time in a U.S. trade agreement, the USMCA includes a specific chapter on SMEs, recognizing their role in each signatory country’s economy.

U.S. companies with fewer than 500 employees account for two-thirds of the companies that trade goods with Canada and Mexico.

Trade Integration

The USMCA promotes cooperation and information exchange to generate more trade and investment opportunities for SMEs in the region, reduces formalities for shipments of less than US$2,500, raises de minimis levels, eliminates the local presence requirement for cross-border service providers, and facilitates the exchange of information and best practices for SME participation in covered government contracts, among other measures.

In addition, this new agreement, effective July 2020, also includes amendments to, among others, minimum wages, increased access to Canadian dairy markets and extension of copyright protection to 70 years after the life of the author.

The USMCA also updates (for the United States and Mexico only) NAFTA’s Chapter 11 investor-state dispute settlement procedures.

The USMCA includes a 16-year «sunset» clause, meaning that the terms of the agreement expire after a specified period of time and are subject to review every six years, at which time the United States, Mexico and Canada can decide whether or not to extend the USMCA.

If the USMCA is terminated or otherwise modified, such termination or modification could materially affect Mexico’s aviation sector.


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