What's the Difference: NAFTA VS. USMCA
NAFTA, or North American Free Trade Agreement has been the agreement set into place to promote fair trade between three counties. This was also implemented to encourage activity among North America's three major economic powers; Northern America, Canada and Mexico.
With this act in place,the agreement eliminated most tariffs on trade between the three countries particularly on items such as agriculture, textiles, and automobiles. These were gradually phased out between 1994 and 2008.
When President Trump came into power, he noted that the NAFTA agreement held a long overdue and much needed change up as they were unfair trade practices in the way of American life. At that time President Trump announced new trade deals all across the board such as the U.S.-Mexico Trade Agreement that would maintain duty-free access for agricultural goods on both sides of the border and eliminate non-tariff barriers while encouraging more agricultural trade between Mexico and the U.S.
Following shortly after the U.S.-Mexico Trade Agreement implementation, Canada followed suit and also agreed to the same terms in a deal to completely replace NAFTA as we know it and turn this into The United States-Mexico-Canada Agreement or USMCA as we now have come to know it.
With the USMCA in place, it marked the first time that fair trade would truly be implemented to "help workers, farmers, ranchers. and businesses to give them a higher standard of trade that would result in freer markets, fairer trade, and robust economic growth in the region. It was also said that it would strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call Northern America home."
This agreement was officially signed and set into place by President Donald J. Trump on January 29, 2020. For a lot of companies either lying in the U.S. or subject to tariffs due to importing and exporting the Norther American borders. it is very important that USMCA is in place to protect their trade and make the process as fair as possible across all fields.
Although the move from NAFTA to USMCA still remains murky waters for some companies looking to obtain drawback refunds, here at CITTA Brokerage, this has remained one of our clearest and highest priorities on our daily agenda to keep up with. That means that if you still want greater clarification as to the difference, we are more than happy to set some time aside to speak to you not only in regards to USMCA, but also to respond to any questions you have surrounding drawback as a whole.