USMCA trade pact to go into effect on July 1

The United States has cleared the way for its long-awaited trade agreement with Canada and Mexico will take effect on July 1 – Canada Day – a month later than initially proposed.

Some industries, including automakers, had been arguing for a delayed implementation because of the difficulties they’re confronting from the COVID-19 pandemic; and Mexico had asked both the U.S. and Canada for a longer transition period for the auto industry to certify that it was meeting new, more stringent North American content rules.

In a statement, U.S. Trade Representative Robert Lighthizer said that both Mexico and Canada had taken measures necessary to comply with their commitments under the U.S.-Mexico-Canada Agreement (USMCA), which replaces the 26-year-old North American Free Trade Agreement (NAFTA).

Lighthizer’s statement also made it clear that the U.S. is anxious to get the deal in place to help facilitate the American recovery from the COVID-19 pandemic.

“The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America,” Lighthizer said. “The USMCA’s entry into force is a landmark achievement in that effort.”