Us International Trade Agreements Specifically Usmca

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The U.S. Mexico-Canada Agreement (USMCA) is a trade agreement between these parties. The USMCA replaced the North American Free Trade Agreement (NAFTA). Many analysts explain these divergent results by the “two-speed” nature of the Mexican economy, in which NAFTA has exhausted the growth of foreign investment, high-tech production and rising wages in the industrial north, while the largely agricultural South has remained disconnected from this new economy. Economist Mauro Guillen of the University of Pennsylvania argued that Mexico`s growing inequality is due to the fact that NAFTA-oriented workers in the North receive much higher wages from trade-related activities. The USMCA is expected to have very little impact on the economy. [113] The pact catalyzed Mexico`s transition from one of the world`s most protectionist economies to one of the most open to trade. Mexico had reduced many of its trade barriers in 1986, when it concluded the WTO`s precursor To the General Agreement on Tariffs and Trade (GATT), but still had an average pre-NAFTA tariff level [PDF] of 10%. Moreover, many economists argue that recent problems with U.S. production have little to do with NAFTA and argue that domestic production was stressed decades before the contract. A 2016 study by David Auteur, David Dorn and Gordon Hanson [PDF] showed that competition with China has had a much greater negative impact on U.S. employment since 2001, when China joined the WTO.