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The New NAFTA



Towards the end of 2018 Canada, Mexico, and the United States officially entered into the United-States-Mexico-Canada Agreement (USMCA), which has been colloquially called NAFTA 2.0. The deal is intended to open new trade opportunities between the member countries. The agreement is too new for the long-term impacts to be seen, but the transportation and logistics industries remain optimistic. USMCA is a large and diverse deal encompassing trade as a whole, as well as many specific industries, and it is therefore difficult to know exactly what the deal means for shippers and logistics providers. Here are 5 quick facts about NAFTA 2.0, or the USMCA.

  • USMCA was written with an automatic sunset clause, which could result in the deal becoming inactive in as little as 16 years. Member countries will reconvene 6 years from the enactment to discuss the agreement and preserve it if desired.
  • The new rules for express shipments mean member countries must either adopt new expedited shipping practices or maintain existing practices, depending on what was used previously. Make sure you know what the rules are that affect your country now.
  • The deal has done away with certificates of origin which were required under NAFTA and instead allows importers to certify the origins of their shipments. The US will be exporting more dairy to Canada under the new rules, due to the expansion of trade access for US dairy products.
  • In order for vehicles to remain tariff-free, 75% of the parts must be manufactured in North America (up 12 points from the previous agreement). This means that more auto parts will be produced in North America.
  • Member countries have committed to more streamlined processes when moving good across borders. The idea is that this should reduce waiting times for items at the border, and speed imports and exports.
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