Do you know what the USMCA is?
Let’s start with the meaning of the acronym, the USMCA is the Agreement between the United States, Mexico and Canada of commercial origin. This agreement came in to replace the previous Free Trade Agreement which is known by its acronym as NAFTA, but in Canada it is known as the Treaty between Mexico, the United States and Canada (T-MEC). The USMCA was implemented as of July 1, 2020, leaving NAFTA behind, after 28 years of implementation.
What are the benefits of the USMCA?
Some people are still unclear about why an agreement between countries needs to be implemented and are not aware of the benefits it brings to businesses and trade in general.
Therefore, here are some of them:
Impact on the exchange rate: the implementation of a treaty of this type stimulates investment in the country and thus the exchange rate favors the national currency.
Transparent regulatory standards: it offers certainty of compliance with the regulations presented in the USMCA, in which there are also considerations of better job opportunities for the companies’ collaborators.
Agricultural agreements: the agricultural area has represented a very important amount of income, especially in recent years, with this treaty the relationship is strengthened and income is preserved.
Agreements with the automotive sector: we continue to support the sector, which has been profitable in Mexico, and its environment also benefits.
Preventive and developmental regulation: issues related to the digital economy, regulatory practices, competition for development and the fight against corruption have already been integrated.
Why is the USMCA so important for the United States, Mexico and Canada?
As a treaty made and reviewed by the three countries, the new regulations consider favorable aspects for each of them. On the other hand, it is made to establish trade relations between the three countries and obtain gains.
Although the United States is the one who benefits the most, both Mexico and Canada obtain profits and are benefited by what has been established.
Do only the companies of these countries benefit?
No, directly and indirectly the employees also benefit from this. For example, within the regulations it is established that in order for companies to obtain benefits, their employees must have better income, decent working conditions and legal benefits.
The market will offer more opportunities and thus competitiveness will increase, giving citizens better options to choose from.
Do foreign companies have any benefits?
Of course, foreign companies can choose to relocate or open a new plant in Mexico, in this way they can access the benefits mentioned above. Companies located in the United States and Canada tend to open units in Mexico because of the proximity and growth opportunities they have in the country, without losing the benefits they get with the USMCA, since Mexico is one of the countries that are part of it.
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