The Canada Mexico Trade Agreement (CMTA) is a trade agreement between Canada and Mexico that was signed in November 2018. It has replaced the North American Free Trade Agreement (NAFTA) which was in place from 1994 to 2018.
The CMTA is designed to modernize and improve upon the NAFTA agreement. It includes provisions for digital trade, intellectual property, labor rights, and environmental protection. The agreement also eliminates many tariffs on goods and services traded between the two countries.
One of the major changes included in the CMTA is the new automotive rules of origin. Under the NAFTA agreement, automakers were required to use a minimum percentage of North American parts in their vehicles to qualify for tariff-free trade. The CMTA increases this requirement from 62.5% to 75%, which is expected to benefit both Canadian and Mexican automakers.
Another notable change is the inclusion of a sunset clause. The CMTA will expire after 16 years, but it will be reviewed every six years to determine whether it should be extended or renegotiated.
The CMTA has been welcomed by businesses and governments in both Canada and Mexico. It is expected to increase trade between the two countries and create new jobs in industries such as automotive manufacturing, agriculture, and energy.
However, there are also concerns about the agreement. Some critics argue that the CMTA does not go far enough in protecting workers` rights and the environment. Others worry that the agreement will lead to job losses in certain industries.
Overall, the Canada Mexico Trade Agreement has the potential to benefit both countries and represents an important step forward in North American trade relations. As the agreement is implemented, it will be important to monitor its impact on various industries and to address any concerns that arise.