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U.S.-Mexico-Canada trade agreement to take effect July 1

U.S. Trade Representative Robert Lighthizer (L),  shown here with President Donald Trump in October 2019, announced Friday that the United States-Mexico-Canada Agreement will take effect July 1. File Photo by Ron Sachs/UPI
U.S. Trade Representative Robert Lighthizer (L),  shown here with President Donald Trump in October 2019, announced Friday that the United States-Mexico-Canada Agreement will take effect July 1. File Photo by Ron Sachs/UPI | License Photo

April 25 (UPI) -- The Trump administration announced Saturday that the reworked trade agreement with Mexico and Canada will take effect July 1.

According to a news release from U.S. Trade Representative Robert Lighthizer's office, the three countries "have taken measures necessary to comply with their commitments" in order to enter the agreement.

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The administration began rewriting the 25-year-old North American Free Trade Agreement three years ago.

The deal, which passed out of the Senate in January and the House in December, keeps much of NAFTA in place, but requires that 75 percent of vehicle parts made in North America must remain duty-free, an increase from 62.5 percent. It also requires that up to 45 percent of car components be made by factory workers earning $16 per hour.

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Some U.S. business leaders have called for a delay in implementation of USMCA due to economic difficulties created by the COVID-19 pandemic -- and even before the pandemic, some argued the July 1 goal was ambitious.

"Given the pandemic's really unprecedented economic disruption, companies will need time to adapt to the new regulations, some of which have yet to be issued," said John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce. "Industry wants the administration to show flexibility in the months before and after entry into force so they can focus on making payroll and avoiding layoffs."

Last week, the Commercial Customs Operations Advisory Committee, which was created by Congress to advise Customs and Border Protection, also urged the administration not to implement the deal before 2021.

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The administration has, in turn, argued that the pandemic has underscored the urgency of implementing the new agreement.

"The crisis and recovery from the Covid-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America," Lighthizer said. "The USMCA's entry into force is a landmark achievement in that effort. Under President Trump's leadership, USTR will continue working to ensure a smooth implementation of the USMCA so that American workers and businesses can enjoy the benefits of the new agreement."

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