The United States-Mexico-Canada Agreement (USMCA) is signed. U.S President Donald Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto replaced the almost 25-year-old North American Free Trade Agreement (NAFTA). The “NAFTA 2.0” was signed in Buenos Aires ahead of the G20 Summit, after over a year of negotiations between the three world leaders.
USMCA -NAFTA 2.0
The USMCA still awaits its vote in Congress, and Canada and Mexico’s respective governments. Only then can it take full effect and replace NAFTA. The U.S, determined to create this new pact, did so with the aim to bring back jobs to America and halt further outsourcing. CNN quoted President Trump, “In the U.S, the new trade pact will support high-paying manufacturing jobs and promote greater access for American exports across the range of sectors including our farming, manufacturing and service industries.
Both U.S political parties have opinions on changes to be made before the deal can pass through the House of Representatives. Some critics believe USMCA will not raise wages, create OR keep jobs. So, the agreement is signed, but the fight for USMCA is far from over.
USMCA and the Apparel Industry
Much attention has been placed on disagreements on regulations of the auto and dairy industries, and also steel and aluminum. But the apparel industry has waited to know how textiles would fare in the agreement. So far, criticism is aimed at other parts of the pact regarding the sectors as mentioned above and social issues included in the new labor chapter.
There seems to be some optimism though. Matt Priest, president, and CEO of the Footwear Distributors and Retailers of America told Footwear News, “Hopefully, this does free up some bandwidth, some manpower for the administration to pursue other, more progressive agreements.” He believes that this could set the U.S Trade Administration on an excellent path to creating deals with Japan, Vietnam, and resolving the trade war with China.
In the same report, National Retailer Federation president and CEO Matthew Shay said USMCA is “critical to protecting North American supply chains that support millions of American jobs.” But he and the NRF will still, “carefully review all the details of the agreement to ensure it promotes U.S. economic growth and maintains access to the products American families need at the prices they can afford.”