Client Alert

After more than one year of negotiations, last Sunday September 30th, 2018, a final agreement was reached between the United States, Mexico and Canada, replacing the NAFTA, in force since 1994.

It is important to note that with the new United States Mexico Canada Agreement (USMCA), the purpose, among other matters, will be to provide new opportunities to Mexican farmers and manufacturers, reducing tariff barriers.

Important differences with NAFTA:

• Canada agreed to yield to the 3.5% of its milk industry, with the purpose of opening the market to US producers.
• In vehicle industry, in order to be able to export without tariff rates, 75% of a vehicle must be originating from the region.
• The agreement will be effective for a term of 16 years, subjected to a review every 6 years.

The agreement shall be sent to the congresses and parliament of the member countries, which will have a term of 60 days for review, proposal of changes, or if applicable, its approval. After this, it is expected that the Agreement is executed by the presidents of Mexico and U.S., and the prime minister of Canada.

For further questions or comments, do not hesitate to contact us.

Contact

Rafael Sánchez
rsanchez@cuestacampos.com

Franscela Sapien
fsapien@cuestacampos.com

www.cuestacampos.com

The above is provided as general information prepared by professionals with regard to the subject matter. This document only refers to the applicable law in Mexico. While every effort has been made to ensure accuracy, no responsibility can be accepted for errors or omissions. The information contained herein should not be relied on as legal, accounting or professional advice being rendered.