The trade agreement between the United States, Canada, and Mexico, commonly known as the USMCA, came into effect on July 1, 2020. This agreement replaced the North American Free Trade Agreement (NAFTA), which had been in place since 1994. The USMCA aims to promote trade between the three countries and modernize the trade relationship.

One of the key changes in the USMCA is the inclusion of new provisions related to digital trade. The agreement includes rules to protect cross-border data flows, prohibit data localization requirements, and prevent customs duties on electronic transmissions. These provisions aim to support digital trade and e-commerce, which are increasingly important in the global economy.

The USMCA also includes provisions related to labor and environmental standards. The agreement requires Mexico to make significant changes to its labor laws to ensure workers have the right to freely organize and collectively bargain. Additionally, the USMCA includes provisions to promote environmental protection and combat wildlife trafficking.

One contentious issue during the negotiation of the USMCA was the rules related to the automotive industry. The agreement requires a higher percentage of a vehicle`s components to be made in North America to qualify for duty-free treatment. The agreement also requires a certain percentage of a vehicle`s components to be made by workers earning at least $16 per hour, which is intended to support higher wages for workers in the auto industry.

Overall, the USMCA aims to modernize the trade relationship between the United States, Canada, and Mexico. The agreement includes new provisions related to digital trade, labor and environmental standards, and the automotive industry. While the agreement has been in effect for less than a year, it is expected to have a significant impact on trade and economic growth in North America.