On July 1, 2020, the Canada-US-Mexico Agreement (CUSMA) officially entered into force, replacing the North American Free Trade Agreement (NAFTA) that had governed trade between the three countries since 1994.

The CUSMA was signed by the leaders of the three countries in November 2018 after a lengthy negotiation process. It aims to modernize and improve upon NAFTA, addressing issues related to digital trade, intellectual property, labor and environmental standards, and dispute resolution mechanisms.

One of the key features of the CUSMA is its focus on increasing North American content in traded goods. Under the new agreement, automobiles must have at least 75% North American content in order to qualify for tariff-free treatment. Additionally, 40-45% of automobile parts must be produced by workers earning at least $16 per hour.

The CUSMA has been lauded by supporters as a positive step forward in North American trade relations. Canadian Prime Minister Justin Trudeau called it a “win-win-win” for all three countries, while US President Donald Trump claimed it would “rebalance” trade in North America.

However, there has been criticism of the agreement as well. Some labor groups in the United States argue that the CUSMA does not go far enough in protecting workers` rights, while some environmentalists have expressed concern that the agreement may not adequately address climate change.

Regardless of the criticisms, the CUSMA is now the governing trade agreement between the three North American countries. As businesses and industries adapt to the new rules and regulations, it remains to be seen how the CUSMA will impact the economies of Canada, the United States, and Mexico in the years to come.