Finally, good news on free trade

MEXICO - In Brief 01 Oct 2018 by Mauricio González

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Finally, after two years of uncertainty --created by President Trump-- and 13 months of hard negotiations a trilateral trade pact between Mexico, Canada and the US was agreed at the last minute. In the future this agreement will be known as USMCA (US-Mexico-Canada Agreement). Legal texts have just been published, and require extensive analysis we will produce in the following days and weeks, but we can anticipate some aspects of the deal and some of its macroeconomic consequences: Automobile trade will not be affected by potential tariffs the US may decide to impose. Aluminum and Steel imports from Mexico and Canada by US will keep the current tariffs but negotiations will take place to be reduced.No special tariffs the US may apply to some products –i.e. based on national security or other arguments-- will not apply to Mexico and Canada for a 60 day period, during which these countries could negotiate a specific deal.In the end no changes were made to dispute resolution mechanisms.Restrictions will apply for Canadian exports of dairy products to US and more flexibility for US exports to canada on those types of products will apply (specifics will be analyzed in our future publications).Sunset clause was modified from its original versión (cancel the agreement every 5 years unless countries agree to extend it). USMCA will last for period of 16 years with a review after 6 years to make prper adjustments if necessary.Intelectual property rights will be preserved for 70 years after authors pass away.Both Mexico and Canada agreed new levels of imports in products acquired from neighbor countries, in order to clasify for tariffs that may be imposed. In Mexico this level wil...