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Breaking news:

"Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement," US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement. [...]

The joint US-Canada statement did not include details of the agreement. However, the new accord is expected to contain key provisions on Canada's dairy industry and car exports to the US.

So, what's substantially different in USMCA vs the old NAFTA?

This might not be answerable right now, but details are likely to emerge in the forthcoming days or even hours.

Actually some details already have emerged:

The officials highlighted in particular that the U.S. had won a “substantial” increase in access to the Canadian dairy market, and that Canada had agreed to end the “class-seven” milk program that undercut American sales of a special dried-milk product.

The same piece notes that chapter-19 dispute resolution mechanism was being kept, despite initial US demands to scrap it.

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Here's a list of differences per an article from CNN, the Business Insider and Science Direct:

  • Labor laws strengthened: ...provides for an interagency committee that will monitor Mexico's labor reform implementation and compliance with labor obligations. It also, for the first time in any US trade agreement, allows for "rapid response" panels to review whether specific facilities are violating workers' rights and to levy duties or penalties on products made at those facilities.1

  • Review clause: The USMCA includes a 16-year expiration date and a provision that requires a review of the deal every six years, when it can be extended. It's less severe than the US' original demand for a sunset clause that would have forced each side to recertify the deal every five years to keep it in effect.2

  • Dispute settlement: NAFTA's dispute-settlement system, which allows member countries to bring grievances against other members over allegations of unfair trading practices, will remain the same, a key win for the Canadians. The investor-state dispute-settlement system, which allows investors to bring grievances against member-country governments, will be phased out for the US and Canada, while certain industries, such as energy, will be able to bring cases against Mexico.2
  • Dairy access: The US will be able to export the equivalent of 3.6% of Canada's dairy market, up from the existing level of about 1%. This is slightly above the 3.25% market access Canada would have given the US as part of the Trans-Pacific Partnership, which Trump pulled the US out of last year. In addition, Canada will get rid of the "Class 7" pricing system that was seen as disadvantaging US farmers.2
  • Access for other agricultural goods: Canada will give the US more access to its chicken, turkey, and egg markets, and British Columbia will allow the sale of US wines at its state-owned liquor stores. Mexico agreed to allow imports of certain US cheeses.2
  • Auto rules: Members must produce 75% of a car for it to pass through the countries duty-free, up from 62.5%. Additionally, 40% of each car must be produced by workers making $16 an hour or more to avoid duties.2
  • Tariff side deals: The US came to side agreements with Mexico and Canada that would largely protect the two countries from tariffs on imported autos and auto parts. Canada would be allowed to ship 2.6 million cars to the US without tariffs, well above the 1.8 million it sent last year, and send $32.4 billion worth of parts without getting hit by tariffs. Mexico's deal was similar, except the country can send $108 billion worth of parts. 2
  • Commitment to not mess with currency levels: While the US, Mexico, and Canada do not actively intervene to strengthen or weaken their currencies, the pact to "achieve and maintain a market-determined exchange rate regime" could be a model for future agreements with countries that are more active in currency markets.2
  • Increased protections for intellectual property: The deal increases the copyright period in Canada to 70 years after the creator's death, up from 50 years, bringing the country in line with the US. Additionally, exclusivity for biologic drugs before generics can be produced will be increased to 10 years in Canada from eight years, a win for the pharma industry. 2
  • Increase in the de minimis levels: The de minimis level is the amount of a good a person can take across the border without being hit with duties. Canada will increase the de minimis level for US goods to 40 Canadian dollars from 20 Canadian dollars; for cross-border shipments like e-commerce, the level will be boosted to 150 Canadian dollars. Mexico will also bump its de minimis level to $50 and duty-free shipments to $117. 2
  • Environmental enforcement changes 3-

The partial removal of ISDS (Investor-state dispute settlement) is a very significant change that will hopefully contribute to the momentum currently building against the investment arbitration system. Other governments should try to capitalize on the Trump Administration's policy position and negotiate the removal of ISDS from their existing trade and investment agreements with the US.

Unfortunately, despite this important change, NAFTA 2.0 generally continues in the tradition of modern trade agreements in that it has very little to do with trade and a great deal to do with empowering certain “rent-seeking interests and politically well-connected firms” (Rodik, 2018). Although it will be more difficult for investors to challenge regulatory action to protect the environment under NAFTA 2.0, it will also be more difficult for governments to develop and adopt regulation in the first place.

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