SAN DIEGO (Border Report) — Friday marks the two-year anniversary of the US-Mexico-Canada trade agreement known as USMCA, and things are looking up for the deal that replaced NAFTA, the North American Free Trade Agreement.
The Wilson Center based in Washington, D.C., recently published a study looking into USMCA’s impact during its brief history, and determined that “the first two years look promising.”
“It’s a modernization over NAFTA, an improvement over NAFTA,” said Earl Anthony Wayne, who co-authored the study along with Diego Marroquín.
Wayne is a former U.S. Ambassador to Mexico under the Obama administration.
“So far the agreement, which is very important to Canada, the United States and Mexico, has been going pretty well,” he said. “Trade has come back up above pre-pandemic” levels.
Wayne says the USMCA is vital for the U.S. economy, generating $2 million per minute in trade every day.
“Canada and Mexico buy more than anyone else in the world, more than all of Europe combined, and, in fact, we trade twice as much with Canada and Mexico than we do with China,” he said.
Wayne says the USMCA allows the three countries to build more things together.
“My wonderful example is a Honda CR-V, which is imported from Mexico from a plant near Guadalajara. But really, 40 percent of the value of that car is from the United States,” he said. “It will show up in the trade statistics as a $35,000 import from Mexico, but really, 40 percent of that are things that were made in the United States. … We really do build things together.”
Wayne says USMCA continues to drive and create many jobs in the United States.
“There are about 12 million U.S. jobs that are supported by this trade so it’s very important for our economy.”
And Wayne stated the three countries, especially Mexico and U.S. benefit from agricultural goods going back and forth across the border.
“We have very complementary agriculture trade: we sell corn and wheat to Mexico; they sell us fruits and vegetables.”
The agreement will receive a formal review in 2025-2026.
According to the study, it’s not yet clear if the early “outcomes will be sufficient to retain public and political support to keep USMCA in its current form.