How Long Is The New Nafta Agreement

The agreement aims to keep the price of medicines low by limiting certain provisions relating to the patent protection of medicines. The original USMCA text removes a 10-year exclusivity period required for biotech drugs, which U.S. Democrats feared would extend higher prices for some of the more expensive drugs. The stakes are so high, so it`s not just the sectors involved. Our health and our planet are at risk. Trade agreements govern how our globalized planet is managed, and there are many things to worry about. There are three primary dispute settlement mechanisms that are included in NAFTA. Chapter 20 is the resolution mechanism from one country to another. It is often considered the least controversial of the three mechanisms and was maintained in the USMCA in its original NAFTA form. Such cases would involve complaints between USMCA member states for violation of a provision of the agreement.

[48] Chapter 19 deals with the justification of anti-dumping or countervailing duties. Without Chapter 19, the remedy for the management of these policies would be through the national legal system. Chapter 19 provides that a USMCA body hears the case and acts as the international commercial court in mediating the dispute. [48] The Trump administration has attempted to remove Chapter 19 of the new USMCA text, although it has been maintained so far in the agreement. The Trump administration`s Office of the U.S. Trade Representative has proposed the USMCA, citing new digital trade measures, stronger trade secret protections and adaptations to rules of origin for motor vehicles as some of the benefits of the trade deal. [112] In a grand concession to the Democrats, the Trump administration agreed to postpone some protective measures for an advanced and very expensive class of drugs called biologics. The final agreement cancels a provision that had offered drugs 10 years of protection against cheaper alternatives in Canada and Mexico. In order to increase cross-border trade, the United States has entered into an agreement with Mexico and Canada to increase their de minimis shipping value. For the first time in decades, Canada will increase from C$20 ($15.38) to C$40 ($30.77) for taxes. Canada also provides duty-free shipments of up to C$150 ($115.38). Mexico will continue to provide $50 tax-free de minimis and will also offer duty-free shipments worth $117.

Dissemination values up to these levels would occur with a minimum of formal entry procedures, making it easier for more businesses, especially small and medium-sized enterprises, to be part of cross-border trade. Canada will also allow the importer to pay taxes 90 days after entry. In addition, there is a provision stating that the agreement itself must be reviewed every six years by the three nations, with a sunset clause of 16 years. The agreement can be extended by 16 years during the six years of revision. [51] The introduction of the sunset clause puts more control in the organization of the future of the USMCA in the hands of national governments. However, there is concern that this could lead to greater uncertainty. Sectors such as automotive manufacturing require significant investments in cross-border supply chains. [52] Given the predominance of the consumer market in the United States, it is likely that this will put pressure on companies to install more production in the United States, with a greater likelihood of increasing the costs of producing these vehicles.

[53] For the first time, the new agreement also provides that 40-45% of parts must come from a high-wage factory for each vehicle duty-free. These factories must pay at least 16 $US per hour in average wages for production workers. That`s about three times the average wage at a Mexican plant right now, and government officials hope the provision will either force automakers to buy more deliveries from Canada or the U.S., or raise wages in Mexico.