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USMCA: characteristics and structure

The Treaty between Mexico, the United States and Canada (USMCA) was signed on November 30, 2018 and amended on December 10, 2019.

It then entered into force on July 1, 2020 and was notified to the World Trade Organization (WTO) on September 16, 2020 pursuant to GATT 1994 Article XXIV.7(a) and GATS Article V.7(a).

The text of the Treaty and its annexes and side letters are available on the Parties’ websites. For example, here.

The Protocol replacing the North American Free Trade Agreement (NAFTA) with the USMCA states that, upon entry into force, the USMCA, attached as an Annex to the Protocol, will replace NAFTA, notwithstanding those provisions set forth in the Treaty that refer to provisions of NAFTA (paragraph 1 of the Protocol).

Accordingly, the Parties notified that the NAFTA had been terminated, notwithstanding these provisions.

USMCA

The Agreement consists of 34 Chapters, several annexes and side letters, as well as an Agreement on Environmental Cooperation and Customs Verification between Mexico and the United States, which forms an integral part of the Agreement.

The Amending Protocol also covers issues related to Chapters 1 (Initial Provisions and General Definitions), 4 (Rules of Origin), 20 (Intellectual Property Rights), 23 (Labor), 24 (Environment), 30 (Administrative and Institutional Provisions) and 31 (Dispute Settlement).

On the other hand, Chapter 34 of the USMCA details the transitional provisions of NAFTA.

Specifically, under the WTO, matters under consideration, including documents or other work in progress, by the Commission or other NAFTA subsidiary body may be continued under any equivalent body in the Agreement, subject to any decision by the Parties as to whether and how such continuation occurs.

Membership of the Committee established under NAFTA Article 2022 (Alternative Means of Dispute Settlement) may be maintained for the Committee under Article 31.22.4 of the Agreement.

NAFTA

For the review and settlement of antidumping and countervailing duty disputes, NAFTA Chapter 19 will continue to apply to binational panel reviews relating to final determinations issued by a Party prior to the entry into force of the Agreement.

In addition, the Secretariat established under Article 30.6 of the Agreement shall perform the functions assigned to the NAFTA Secretariat established under NAFTA Chapter 19 and under the domestic enforcement procedure adopted by the Parties in connection therewith, until the binational panel has issued a decision and the Secretariat has published a notice of termination of the panel review.

Finally, appropriate arrangements will be made to respond to requests for preferential treatment under NAFTA after the entry into force of the Agreement.

Also, the provisions of NAFTA Chapter 5 (Customs Procedures) will continue to apply to goods for which preferential tariff treatment was requested under NAFTA (Article 34.1).

 

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