The United States, Canada, and Mexico have started negotiations to renew the North American trade pact, known as the US-Mexico-Canada Agreement (USMCA). The pact, which came into effect in 2020, governs trade between the three countries and is up for renewal every six years.

Background

The USMCA replaced the North American Free Trade Agreement (NAFTA) and aims to promote fair trade and economic growth among the three countries. However, the negotiations are expected to be challenging, with the US seeking changes to the agreement to reduce its trade deficits with Canada and Mexico.

The US is pushing for a higher threshold of North American content in automotive products, which could lead to more auto factory jobs in the US. However, this could also disrupt established supply chains and increase prices for new cars. The US is also seeking a brand-new requirement that 50% of cars be made in the US, which is opposed by both Mexico and Canada.

Impact on Businesses

Many businesses, including those in the automotive and agricultural sectors, are eager for stability and predictability in trade policies. The USMCA has provided a framework for trade between the three countries, but the ongoing negotiations and potential changes to the agreement are causing uncertainty.

Companies like PKGD Group, which imports agave spirits from Mexico, are seeking consistency in trade policies. The company’s co-founder, Shawn Miller, stated that his interest in the USMCA renewal is simply consistency and knowing what the rules will be.

Original reporting: KTBS 3 (Shreveport) — read the source article.