Today marks a new era in North American trade, with the July 1, 2020 “Entry-into-Force” of USMCA, a trade agreement that, political rhetoric aside, takes the best of a nearly three-decade-old arrangement and turns it into something that cements the economic, social and environmental ties so critical to the overall wellbeing of people in Canada, the United States and Mexico.
You might have heard that the USMCA marks the end of NAFTA. Of course it does, but not in the way some people are telling you. Keep in mind, NAFTA took effect in 1993, when Whitney Houston and Selena were on top of the pop charts and “Jurassic Park” made us all scared of velociraptors. The world has changed a lot since then.
So in today’s trade world we needed to account for digital trade and for the dramatically changed financial service sector. We also needed stronger labor and environmental provisions, to account for a world rightfully more sensitive to worker rights and to climate change. Of course, NAFTA had to change, to become USMCA.
But even though we needed a new agreement, we still maintain the NAFTA provisions that expanded markets, created jobs, and enhanced regional trade and investment, just like we are able to listen to Whitney and Selena on Spotify and watch “Jurassic” and its many sequels on Netflix.
NAFTA was not perfect, and neither is the USMCA. The sunset clause places doubt over the agreement’s longevity and forced rules of origin could make North America less competitive against Europe, South America, Asia and an emerging Africa. But if Canada, the United States and Mexico resolve to engage more thoroughly on the issues that will sometimes divide us – USMCA, for example, contains a “rapid response mechanism” to resolve disputes on labor issues – the agreement is likely to improve for the benefit of everyone.
The three countries will continue to disagree, as three sovereign nations with different political structures naturally do. There are issues to pay attention to, including labor monitoring and compliance and the approval process for biotech innovations. But the public talk about those issues ought to cool down in the coming months and years, because the provisions of USMCA actually give policymakers tools to resolve these disagreements.
Naturally, USMCA will evolve as economic conditions and society evolves. New technologies will come our way, another external challenge like the current virus pandemic will certainly come and the climate crisis will get more urgent. But the USMCA gives our three countries ways to innovative, adapt and cooperate with each other – as we should!
You only need to go to the USMCA’s preamble to have a sense of optimism. It says the countries resolve to, among other things, “FURTHER strengthen their close economic relationship,” “SEEK to facilitate women’s and men’s equal access to and ability to benefit from … this Agreement …” and “PROTECT human, animal, or plant life or health…and advance science-based decision making,” and “RECOGNIZE…increased engagement by indigenous people,” and “STRENGTHEN ANEW the longstanding friendship.”
As any reader can see, USMCA is a living and breathing trade agreement, not a trade disagreement. Our three countries need each other, and our citizens are more prosperous individually when we can prosper together. So today, as we embark on this new era, policymakers and leaders in Canada, Mexico and the United States should know that making sure this sustainable and forward-looking trade agreement can continue to work and be improved upon will preserve a bright future for everyone in North America.
* Devry Boughner Vorwerk is CEO of DevryBV Sustainable Strategies, Board Member of the US-Mexico Foundation, and former Corporate Vice President of Global Corporate Affairs at Cargill. Twitter: @DevryBV