North American Officials Downplay Trade Tensions A Year Into Pact

Trade ambassadors toasted the one-year anniversary of the United States-Mexico-Canada Agreement (USMCA) on Wednesday, and downplayed recent tensions between the countries as a normal aspect of engagement.

"Implementation is ongoing," US Trade Representative Katherine Tai said on the eve of the one-year anniversary of the start of the pact that updated the North America Free Trade Agreement (NAFTA).

"Work on this agreement is never going to be finished," Tai said, adding that the collective mission of the USMCA's mechanisms is to "manage our frictions."

The new agreement entered into force July 1, 2020 after the US Congress approved it with overwhelming bipartisan majorities. It revised the 1994 NAFTA, updating provisions on intellectual property, as well as on labor and environmental protections.

Experts say trade integration within the bloc still is not as sophisticated as in the European Union, but the agreements have been credited with supporting thousands of new US automotive jobs and billions of dollars of trade in machinery, agriculture and energy.

Since the USMCA went into force, there have been continued squabbles between the United States and Canada on the dairy and lumber industries.

And Washington has twice invoked the USMCA dispute mechanisms to ask Mexico City to investigate violations of union rights in the automotive sector, notably at a General Motors plant.

Tai said the bloc can serve as a bulwark against unfair competition from other regions, and the three governments should work together to combat the importation of goods with forced labor.

The agreement "will help us promote the competitiveness of North America and respond to the policies of non-market economies that undercut our businesses and our workers," she said at the event organized by the Wilson Center, without mentioning China.

Mary Ng, Canada's minister of small business, export promotion and international trade, also focused on the benefits, pointing to an example during the pandemic where the three nations collaborated on a successful project to manufacture ventilators.

And despite some tensions, she said a good hamburger can involve meat grown in Canada and processed in the United States with tomatoes from Mexico.

"This is how interconnected our economies are at the basic level," Ng said. "There are going to be bumps in the road, but bumps are just stepping stones to success."

Tatiana Clouthier Carrillo, Mexico's Economy secretary, said future priorities for the pact include better integration in the digital economy.