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The new trade agreement, officially known as the United States-Mexico-Canada Agreement (USMCA) was signed by the three countries in 2018 and is set to replace the North American Free Trade Agreement (NAFTA). The USMCA has been touted as a modernized version of NAFTA and aims to address issues including labor rights, intellectual property protection, and digital trade. In this article, we will explore the key differences between the two agreements.

Labor Standards

One of the biggest issues with NAFTA was the lack of labor standards. The USMCA addresses this by requiring Mexico to ensure that workers have the right to collectively bargain and form unions. It also requires Mexico to enforce its labor laws, which were previously not effectively enforced. The agreement also includes provisions to improve working conditions and to prohibit the use of forced labor. The USMCA`s labor provisions are more robust than those in NAFTA.

Intellectual Property Protection

NAFTA did not have strong provisions for protecting intellectual property. The USMCA includes provisions to protect intellectual property, including patents, trademarks, and copyrights. The agreement includes 10 years of data protection for biologic drugs, which is a significant increase from the eight years included in NAFTA. It also establishes rules for internet service providers to remove infringing content and clarifies the liability for third-party infringement.

Digital Trade

NAFTA was negotiated before the widespread adoption of e-commerce, and as such, it did not address digital trade. The USMCA includes provisions on digital trade to protect the free flow of data between the three countries. It prohibits data localization, which requires data to be stored within a specific country or region, and prohibits tariffs on digital products, such as software and music. The agreement also includes provisions on cybersecurity, data privacy, and consumer protection.

Dispute Resolution

NAFTA had a dispute resolution mechanism, but it was criticized as being too slow and ineffective. The USMCA includes several changes to the dispute resolution process, including a streamlined process for resolving disputes and a panel of judges to hear cases. The agreement also includes a sunset clause, which means that the agreement will expire in 16 years unless the three countries agree to renew it.


The USMCA is a modernized version of NAFTA that addresses several issues not covered in the original agreement. It includes stronger labor standards, better intellectual property protection, and provisions on digital trade. The dispute resolution process has also been improved and includes a sunset clause. The USMCA has been ratified by all three countries and is expected to boost economic growth and trade between the three nations.