WASHINGTON – The US-Mexico-Canada Agreement (USMCA) officially came into force on July 1 after two years of negotiations and another year of securing federal lawmakers’ support for the trade pact. Robert Lighthizer, US Trade Representative, heralded the start “…of a new and better chapter for trade between the United States, Mexico and Canada.”

President Donald Trump signed the USMCA into law in January. The modified free trade agreement replaces the North American Free Trade Agreement (NAFTA) that has governed trade in the region for more than 20 years. The updated framework of USMCA is, however, thought to improve upon shortcomings of NAFTA.

“The USMCA contains significant improvements and modernized approaches that will deliver more jobs, stronger worker protections, expanded market access, and greater opportunities to trade for companies large and small,” Lighthizer said. “We have worked closely with the governments of Mexico and Canada to ensure that the obligations and responsibilities of all three nations under the agreement have been met, and we will continue to do so to ensure the USMCA is enforced.”

The FTA also opens Canadian markets to American dairy producers, imposes stricter labor requirements in Mexico and provides incentives for manufacturing products in North America. USMCA retains zero tariffs on most of the agricultural trade between the three nations and ensures access to important markets for US meat and poultry products.

“The US meat and poultry industry exports $5.5 billion annually in products to Canada and Mexico,” said Julie Anna Potts, chief executive officer of the North American Meat Institute. “This agreement is critical to meat and poultry processors and the millions of US farmers, ranchers, allied manufacturers and transportation companies in the food supply chain.”

Mexico and Canada are among the top four destinations for US beef and pork. The North American market for the meat and poultry industry is nearly completely integrated, NAMI said, and this integration is essential to the long-term viability of that market.

Since NAFTA came into force in 1994, exports of US beef to Canada and Mexico grew from $656 million to more than $1.75 billion in 2019, while pork exports increased in value from $322 million to more than $2 billion during that same time period, NAMI said. Additionally, Canada and Mexico imported nearly 22% of total US beef exports and 30% of all US pork exports in 2019.

Challenges to the agreement include enforcing provisions that strengthen worker protections and ensuring commitments to enhanced market access to agriculture products are kept. Complicating this work is the coronavirus (COVID-19) pandemic. But Lighthizer said the pandemic only highlighted the importance of the USMCA.

“The recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States must stop the outsourcing of jobs and increase our manufacturing capacity and investment here at home,” Lighthizer said. “With the USMCA’s entry into force, we take another giant step forward in reaching this goal and advancing President Trump’s vision for pro-worker trade policies.”