Modernizing NAFTA

Lukas Munoz, Staff Writer

On July, the United States-Mexico-Canada Agreement (USMCA) will officially replace The North American Free Trade Agreement (NAFTA) as the functioning trade agreement between the United States, Mexico, and Canada. Ratifying the USMCA has straddled the line between politics and economic policy.

It’s quite ironic that the USMCA will constitute a large portion of Donald Trump’s legacy as president despite his “America First” trade philosophy that verges on protectionism.

In time, the USMCA may reduce the damage done to American trade and image following the current administration’s decision to increase tariffs including those on imported steel and aluminum, which disproportionately harmed Mexico and Canada

However, the USMCA is a step in the right direction, because it preserves a free trade agreement in North America and modernizes it.

Nearly 25 years ago, NAFTA was ratified. Before the digital revolution entered a new stage at the beginning of the 21st century, and before digital commerce and the internet became a driving force for economic growth.

Therefore, it makes sense that USMCA includes provisions, unlike NAFTA, on goods and services accessed through the internet. The USMCA ensures, by including agreements on intellectual property rights, that US tech companies have the incentives to continue innovating, growing, and creating jobs

Furthermore, consumption today is vastly different today than it was years ago. As the world switches to digital trade and online shopping, it is of great value that the USMCA sets the free trade foundations for online shopping not included in NAFTA.

By prohibiting tariffs and other online commerce barriers, the USMCA will effectively increase the consumption of all North American goods purchased online as they will not have the higher prices associated with tariffs.

Despite President Trump’s previous protectionist, isolationist stances, and rhetoric, it is essential to separate his image from that of the USMCA because the USMCA is fundamental, non-partisan, and beneficial as all Americans will reap the rewards from free trade within North America.