Industry groups welcome USMCA implementation

Supply chain leaders praised this week’s implementation of the United States Mexico Canada Agreement (USMCA), saying it modernizes the North American trade framework and will create a more competitive marketplace.

Leaders from industry trade groups and logistics firms said the trade pact is vital to the economies of all three nations, but some cautioned that adapting to the new regulations may prove complicated as economies continue to deal with slowdowns related to the Covid-19 pandemic. USMCA, which updates and replaces the North American Free Trade Agreement (NAFTA), contains new provisions regarding zero-tariff requirements for how much of a product must be made or sourced in the region and also addresses e-commerce and the digital economy, labor, and environmental issues, among others.

“The U.S.-Mexico-Canada agreement will take time, cost, and complexity out of trade at a time when we need to be helping our economies rebound from the pandemic,” Laura Lane, president of UPS Global Public Affairs, said in a statement Thursday. “With provisions that open markets for small and medium sized businesses, spur the growth of e-commerce, and support additional jobs for workers in all three economies, the enactment of this pact is timely.”

Lane added: “This trilateral deal is particularly noteworthy given the modernizing provisions it includes that prohibit trade discrimination on the basis of gender and that safeguard cross-border data flows while also addressing new cybersecurity challenges.”

Brian Dodge, president of the Retail Industry Leaders Association (RILA), agrees.

“The new U.S.-Mexico-Canada Agreement strengthens two of our most important trading relationships and creates certainty for retailers to invest, plan for the future, create jobs, and provide consumers with the widest possible selection of affordable and quality products,” Dodge said in a statement Wednesday. “Never has that been more important than during the economic crisis brought on by the COVID-19 outbreak.”

Leaders from the chambers of commerce of all three countries also weighed in, supporting the deal but pointing to compliance challenges that may be complicated by the pandemic. 

“Overall, the agreement increases our region's competitiveness, which is vital in an uncertain international context characterized by protectionist temptations,” Thomas J. Donohue, CEO of the U.S. Chamber of Commerce, Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, and Carlos Salazar Lomelín, chairman of Mexico’s Consejo Coordinador Empresarial (Business Coordinating Council), said in a joint statement Wednesday. “The work does not stop now. There are challenges where flexibility will be needed. The auto industry—our region’s largest manufacturing sector—will have to comply with hundreds of pages of new regulations implementing strict content requirements. New rules in a number of other areas, such as labor, will also present compliance challenges. The Covid-19 pandemic and economic downturn may make adapting to these new rules even more challenging.”

USMCA went into force July 1.