NAFTA Lives

By Isaac Cohen*
Last Sunday, half an hour before midnight, trade negotiators from Canada, Mexico and the United States saved the trilateral agreement known as NAFTA, but with a new name. Now it will be called USMCA (United States, Mexico, Canada), a name which according to one observer “sounds a lot like a branch of the military.”
However, the name change is not the most important consequence of the agreement. The main event was the fact that the tripartite agreement survived the protectionist onslaught emanating from the White House, based on whining laments that its trading partners were taking advantage of the United States.
There were also mutual concessions which, in the end, led to the successful completion of the negotiation. For instance, the United States obtained from Mexico an increase in the rule of origin for automobiles. Also, last minute concessions were granted by Canada in the highly protected dairy sector, while some essential components remained unchanged, such as the dispute settlement procedures and Canada’s exclusion of cultural activities. Additionally, some of the decisions agreed in the negotiation of the Trans Pacific Partnership, from which President Donald Trump withdrew, were incorporated into the new agreement. Finally, a new clause was agreed for reviewing the agreement in six years, including a potential extension to ten years, which is better than the six months notice required for unilateral withdrawal from NAFTA.
It can be expected that the new USMCA, as the NAFTA, will be in force another quarter century, during which the members will increase their trading relationship by at least another trillion dollars.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.