Trade Agreements between Mexico and US: A Comprehensive Overview
The trade relationship between Mexico and the United States is one of the most significant and complex in the world. The two countries have a long history of economic interaction, and their trade relationship has been shaped by various agreements over the years.
Currently, the two countries are bound by several trade agreements that have played a crucial role in shaping their economic ties. In this article, we will take a comprehensive overview of trade agreements between Mexico and the US.
North American Free Trade Agreement (NAFTA)
NAFTA is one of the most crucial trade agreements between Mexico and the US. Signed in 1994, the agreement aimed to establish a free trade area between the US, Mexico, and Canada. NAFTA eliminated most tariffs on goods traded between the three countries and promoted investment by reducing barriers to trade.
After more than two decades of NAFTA, the US, Canada, and Mexico reached a new trade agreement called the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA in 2020. The USMCA builds on the NAFTA framework but includes significant updates and changes.
United States-Mexico-Canada Agreement (USMCA)
USMCA is the newest trade agreement between Mexico and the US. This agreement updates and modernizes NAFTA by addressing new issues that have arisen since NAFTA was originally signed. For example, USMCA includes new rules on digital trade, labor, and environmental standards.
USMCA also includes provisions to encourage the use of North American-made goods by requiring a certain percentage of vehicle parts to be made in North America to qualify for tariff-free treatment. The agreement also addresses the dairy industry, which was a contentious issue during NAFTA negotiations.
Mexico-US Joint Declaration on Cooperation for the Improvement of Competitiveness and Growth of their Economies
In May 2013, the US and Mexico signed the Joint Declaration on Cooperation for the Improvement of Competitiveness and Growth of their Economies. This agreement aims to promote economic growth by increasing trade and investment between the two countries.
The Joint Declaration includes several provisions aimed at increasing trade and investment, such as improving the efficiency of border crossings and customs procedures, enhancing the protection of intellectual property, and promoting small and medium-sized business development.
Mexico and the US have a complicated and significant trade relationship, with several trade agreements shaping their economic ties. NAFTA was one of the most important agreements, establishing a free trade area between the two countries. USMCA builds on this framework, and the Joint Declaration aims to promote economic growth by increasing trade and investment. These agreements reflect the importance of the economic relationship between Mexico and the US, which has many benefits for both countries.