Mexico US Trade Agreement: The Ins and Outs

The trade relationship between Mexico and the United States is one that is often discussed in international trade circles. In 2018, the two countries negotiated and signed a new trade agreement, the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA). The new agreement has important implications for both countries. In this article, we will explore the key elements of the Mexico US trade agreement, including what it means for businesses and consumers alike.

Overview of the USMCA

The USMCA was signed on November 30, 2018, by the leaders of the United States, Mexico, and Canada. The agreement took effect on July 1, 2020, after all three countries had ratified it. The USMCA was designed to update and modernize NAFTA, which had been in place since 1994. The agreement covers a wide range of trade issues, including agriculture, intellectual property, and digital trade.

One of the main goals of the USMCA is to promote balanced trade among the three countries. Under the agreement, the United States will be able to sell more dairy products to Canada, while Canada will have increased access to the US market for its dairy products. The USMCA also includes new provisions to protect intellectual property, strengthen labor and environmental standards, and promote e-commerce.

Impact on Mexican Businesses

Mexico’s economy is heavily dependent on trade with the United States. In 2019, Mexico exported over $358 billion worth of goods to the United States, making it Mexico’s largest trading partner. The USMCA will help to ensure that this trade relationship continues to be strong and mutually beneficial.

One of the biggest benefits for Mexican businesses is the elimination of tariffs on many goods traded between the two countries. For example, tariffs on Mexican auto exports to the United States will remain at 2.5%, rather than the 25% that was threatened under the previous administration. This will be a significant boost for the Mexican auto industry, which is one of the country’s largest employers.

The USMCA also promotes the development of digital trade. This is important for Mexican businesses, as e-commerce is becoming an increasingly important part of the global economy. The agreement includes provisions to protect the rights of digital content creators, such as musicians and authors, and to ensure that data can flow freely across borders.

Impact on US Businesses

The USMCA is also expected to have a positive impact on US businesses. The new agreement is designed to encourage investment in the United States and to promote job growth. In particular, the agreement includes provisions to support small and medium-sized businesses, which are the backbone of the US economy.

One of the main benefits for US businesses is increased access to the Canadian market. Under the USMCA, Canada has agreed to open its dairy market to US producers. This will create new opportunities for US dairy farmers and processors. The agreement also includes provisions to protect intellectual property, which is particularly important for US tech companies.

What it Means for Consumers

Consumers in both countries are likely to benefit from the USMCA. The agreement is designed to promote fair competition and to ensure that consumers have access to high-quality goods and services. For example, the elimination of tariffs on many goods will help to keep prices down for consumers. The agreement also includes provisions to ensure that food safety standards are met and to protect consumers from counterfeit or pirated goods.


The new Mexico US trade agreement is an important development in the world of international trade. The USMCA is designed to modernize and update NAFTA, while also promoting fair trade and investment. Mexican businesses will benefit from increased access to the US market, while US businesses will benefit from increased access to the Canadian market. Consumers in both countries will benefit from increased competition and access to high-quality goods and services. Overall, the USMCA is a positive development for the North American economy.