The U.S.-Mexico-Canada agreement, also known as USMCA, is a trade agreement between the three nations signed on November 30, 2018. The USMCA replaced the North American Free Trade Agreement (NAFTA), which has been in force since January 1994. In accordance with NAFTA, tariffs on many goods that escape between the three major economic powers of North America have been phased out. Until 2008, tariffs on various agricultural products, textiles, automobiles and other products were reduced or eliminated. The agreement between the United States of America, the United States of Mexico and Canada is a free trade agreement between Canada, Mexico and the United States in lieu of the North American Free Trade Agreement (NAFTA).    The agreement has been referred to as NAFTA 2.0 or “New ALEFTA, since many nafta provisions have been introduced and its amendments have been found to be largely incremental. On 1 July 2020, the USMCA came into force in all Member States. The full text of the agreement between the United States, Mexico and Canada is available here. The agreement gives U.S. farmers additional access to foreign markets, particularly in Canada. It does not dismantle Canada`s “supply management system,” which imposes the amount of production on Canadian farmers so that they can be profitable. But Canada has agreed to abolish a program that helps sellers of certain dairy products in Switzerland and abroad and opens its market to milk, cream, butter, cheese and other U.S. products.
In return, the United States expanded access to its market for the Canadian dairy and sugar industry. The system can no longer be used in disputes between the United States and Canada and is limited to disagreements between Mexico and the United States over a limited range of industries, including petrochemicals, telecommunications, infrastructure and power generation. The USMCA is expected to have a very small impact on the economy.  An International Monetary Fund (IMF) discussion paper published at the end of March 2019 stated that the agreement would have a “negligible” impact on the general economy.   The IMF study predicted that the USMCA “would have a negative impact on trade in the automotive, textile and clothing sectors, while achieving modest welfare gains, mainly due to improved access to the goods market, with a negligible impact on real GDP.”  The IMF study concluded that the economic benefits of the USMCA would be greatly improved if there was an end to Trump`s trade war (i.e., if the United States did so.