The United States, Mexico and Canada have reached an agreement to modernize NAFTA, which is 25 years old, into a high-level agreement of the 21st century. The new agreement between the United States and Mexico-Canada (USMCA) will support mutually beneficial trade, which will lead to freer markets, fairer trade and robust economic growth in North America. To support North American jobs, the agreement provides for new trade rules to get higher wages, making 40 to 45 percent of the automotive content of workers earning at least $16 an hour. The second parallel agreement is the North American Environmental Cooperation Agreement (NAAEC), which established the Commission for Environmental Cooperation (CEC) in 1994. The CEC is responsible for strengthening regional cooperation in the environmental field, reducing potential trade and environmental conflicts and promoting effective enforcement of environmental legislation. It also facilitates public cooperation and participation in efforts to promote conservation, protection and improvement of the North American environment. It consists of three main components: the Council (Minister of the Environment), the Joint Advisory Committee of Governments (JPAC) and the Secretariat, which is headquartered in Montreal. It has an annual budget of $9 million, with Canada, Mexico and the United States contributing $3 million per year and settled by consensus (non-majority). In September 2018, the United States reached an agreement with Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA). Once completed and implemented, the new U.S.-Mexico-Canada Agreement (USMCA) will further strengthen U.S. highly productive and integrated agricultural relationships with its North American partners, ensure preferential market access for U.S.
exporters, and strengthen commitments to fair and science-based trade rules. The new agreement came into force on July 1, 2020. The full text of the agreement between the United States, Mexico and Canada is available here. The CUSMA results, signed on the sidelines of the G20 of Heads of State and Government in Buenos Aires in November 2018, preserve key elements of long-term trade relations and contain new and updated provisions to address 21st century trade issues and foster opportunities for the nearly half a billion people who call North America at home. The Trump administration`s office proposed the USMCA citing new measures for digital commerce, strengthening the protection of trade secrets and adapting the rules of origin of automobiles among the benefits of the trade agreement.  A new addition to the USMCA is the inclusion of Chapter 33, which covers macroeconomic policies and exchange rate issues. This is considered important because it could set a precedent for future trade agreements.  Chapter 33 sets out requirements for currency and macroeconomic transparency that, in the event of a breach, would be grounds for litigation under Chapter 20.
 The United States, Canada and Mexico currently meet all of these transparency requirements in addition to substantive policy requirements that comply with the international Monetary Fund`s articles.  The Canadian government noted that “the results of CUSMA preserve key elements of long-term trade relations and contain new and updated provisions to address 21st century trade issues and foster opportunities.” The agreement is the result of a renegotiation between the member states of the North American Free Trade Agreement, which gave informal agreement on 30 September 2018 and officially on 1 October under the new agreement.  The USMCA was proposed by U.S. President Donald Trump and signed on November 30, 2018 by Trump, Mexican President Enrique Pea Nieto and Canadian Prime Minister Justin Trudeau as a secondary event of the 2018 G20 summit in Buenos Aires.