US Trade Representative Issues Trade Fact Sheet on US-MX Trade Agreement

The Office of the United States Trade Representative (USTR) recently published a fact sheet detailing the key components of the recently agreed upon US-Mexico Trade Agreement.  Some of the key changes proposed in the rule include:

  • Auto sector: At least 75% of a vehicle must have been built in either the US or Mexico in order for the vehicle to sell in the US without tariffs.  The original NAFTA agreement only required 62.5%.
  • Intellectual property: The agreement extends US copyright protection into Mexico and strengthens the patent protections in the pharmaceutical and agricultural sectors.  It also addresses digital trade, something that was not covered under NAFTA.
  • Labor and Environmental: The agreement requires companies to "prohibit the importation of goods produced by forced labor, to address violence against workers exercising their labor rights, and to ensure that migrant workers are protected under labor laws.".  It also addresses air quality issues.
  • Duty free limits: The agreement raises the "de minimis" level from $50 to $100 for duty free entry from the US into Mexico for Mexican citizens.  U.S. citizens are allowed to import up to $800 worth of goods duty free.
  • Sunset Clause: The pact, if agreed upon would run for 16 years.  After 6 years both sides would met and decide if they wanted to renew for another 16 years.      

The deal requires approval from the US Congress before it can become law.  The Administration intends to submit the paperwork to get the process started in Congress as early as Friday.  This timeline potentially gives Canada only a week to sign-on to the deal.  

Click here for the full Fact Sheet.  

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