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CUSMA pact to take effect July 1, USTR says

Canada/U.S. border signage in downtown Detroit. (RiverNorthPhotography/Getty Images)

Washington | Reuters — U.S. Trade Representative Robert Lighthizer on Friday said he has notified Congress that the new U.S.-Mexico-Canada trade agreement will take effect on July 1, a month later than initially proposed.

In a statement, Lighthizer said both Mexico and Canada had taken measures necessary to comply with their commitments under the U.S.-Mexico-Canada Agreement (CUSMA), which replaces the 26-year-old North American Free Trade Agreement (NAFTA).

Some industries, including automakers, had been arguing for a delayed implementation because of the difficulties they are facing from the coronavirus pandemic.

Mexico had asked the U.S. and Canada for a longer transition period for the auto industry to certify that it was meeting new, more stringent North American content rules.

Lighthizer said his office would work to ensure a smooth implementation of the new trade rules.

“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 in a statement, calling CUSMA’s entry into force “a landmark achievement in that effort.”

The accord includes tougher rules on labour and automotive content but leaves US$1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged. U.S. President Donald Trump had been a critic of NAFTA.

— Reporting for Reuters by Andrea Shalal and David Lawder.

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