What Is The New North American Trade Agreement

NAFTA includes three main dispute settlement mechanisms. Chapter 20 is the country-to-country solution mechanism. It is often considered the least controversial of the three mechanisms and has been maintained in its original NAFTA form in the USMCA. Such cases would include complaints between USMCA member states that a provision of the agreement has been violated. [48] Chapter 19 Dispute Settlement deals with the justification of anti-dumping or countervailing duties. Without Chapter 19, the legal recourse for the management of these policies would be through the national legal system. Chapter 19 specifies that a USMCA committee will hear the case and act as an international trade tribunal to resolve the dispute. [48] The Trump administration has attempted to remove Chapter 19 of the new TEXT of the USMCA, although it has already been in place in the agreement. However, there is concern that this could lead to greater uncertainty. Industries such as automotive manufacturing require significant investments in cross-border supply chains. [52] Given the predominance of the U.S. consumer market, this is likely to increase pressure on firms to locate more production in the U.S., which is more likely to result in higher production costs for these vehicles.

[53] In early 2020, the U.S. Congress approved the USMCA with large bipartisan majorities in both houses, and the agreement went into effect on July 1. .