United States-Mexico-Canada Agreement

October 4, 2018

After 14 months of negotiations to update NAFTA, the United States, Mexico, and Canada have reached a new modernized trade agreement, now formally known as the United States-Mexico-Canada Agreement (USMCA). NAFTA will remain in effect until Congress approves USMCA under Trade Promotion Authority procedures.

The Office of the U.S. Trade Representative released a fact sheet outlining changes important to U.S. producers, including Canadian market access for U.S poultry and eggs. In addition to the $600 million worth of poultry and egg products that the United States exported to Canada in 2017, Canada will provide new tariff rate quota of ten million dozen eggs and egg-equivalent products in year one of the agreement, growing one percent for an additional ten years.  Also, Canada agreed to allow 30 percent of import licenses for shell egg imports to be granted to new entrants.  As with chicken, the United States will still be eligible to export up to 21.37 million dozen egg and egg-equivalent products under Canada’s World Trade Organization tariff rate quota regime.  The agreement also requires that Canada ensure imports of egg products continue to be eligible for Canada’s Duties Relief Program (DRP) and Import-Re-export Program (IREP).

More broadly, the Agreement modernizes various aspects of NAFTA. USMCA is the first U.S. trade agreement to address unfair currency practices.  Unlike NAFTA, USMCA brings enforceable labor obligations into the core of the agreement, including Mexico’s commitment to recognize the right to collective bargaining.  A new labor value content rule requires 40-45 percent of auto content to be made by workers earning at least $16 per hour.  The core of the agreement also includes enforceable, high-standard environmental provisions, including obligations to combat trafficking in wildlife, timber, and fish, as well as addressing air quality and marine litter.

“USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region.  It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home,” said the three countries in a joint statement.