NAFTA 2.0

NAFTA 2.0

1. Main Changes

   • Labor
     • The implementation of internationally recognized rights under the national legislation of each Party, including: (Article 23.3)
       • Acceptable conditions on minimum wages
       • Working hours
       • Safety and health at work
     • Transition to effective union democracy
       • Introducing transparency in the election of union leaders and accountability for union activities.
   • Environmental
     • Promotion and transparency of environmental regulatory frameworks
       • Now these cannot be repealed or modified to promote trade or investment
     • It aims to combat the illegal trade in wildlife, illegal logging and fishing
       • By promoting mechanisms for sustainable forestry and fisheries management
         • Elimination of subsidies for overfishing
       • Chapter 24 highlights the requirement of environmentally friendly business conduct and corporate social responsibility
   • Pharmaceuticals
     • Originally included 10 years of market exclusivity for biologic drugs, given to the rising concern about high drug prices.
       • The three parties determine for themselves the appropriate length of market exclusivity for these drugs
   • Trade
     • Chapter 11 aims to facilitate trade in goods between the Parties to the Agreement
       • Provisions are incorporated regarding the transparency of the processes of elaboration, adoption and application of the norms, the RT and the PEC
         • A TR is a document that establishes the characteristics of a product or the processes and production methods related to them
         • PEC es todo procedimiento utilizado, directa o indirectamente, para determinar que se cumplen las prescripciones pertinentes de los RT o las normas
   • Certificate of Origin
     • They updated the provisions of origin to make them compatible with modern disciplines that have been negotiated by our country in recent Treaties
       • This will allow an increase in efficiency and a reduction in administrative costs, by eliminating the certificate of origin format and making verifications more expeditious
   • Automotive Industry
     • The treaty includes new requirements that must be met to claim preferential tariff treatment in this industry, including:
       • Higher percentages of Regional Content Value (VCR)
       • Original essential auto parts (engine, transmission, body and chassis, axle, suspension system, steering system and advanced battery)
       • North American originating steel and aluminum purchasing requirements
       • Labor Value Content (VCL) requirements
   • Dispute Resolution
     • It seeks to make the operation and application of the provisions of the Treaty effective, as well as to grant certainty and legal security to the Parties and legal operators
       • Mechanisms
         • I. Dispute settlement regarding commercial remedies (antidumping and subsidies). Chapter 19 of NAFTA, 10 of T-MEC
         • II. Investor-State dispute settlement. Chapter 11 of NAFTA, 14 of the T-MEC
           • Disciplines for investment protection
           • Investor-State dispute settlement mechanism, arbitrations
         • III. State - State Dispute Settlement. Chapter 20 of NAFTA, 31 of the T-MEC
   • E-commerce
     • Unlike NAFTA, the T-MEC included a chapter on e-commerce
       • Promote economic growth
       • Generate development opportunities, especially for small and medium businesses
       • Have adequate legal frameworks that promote consumer confidence and security
       • Avoid unnecessary barriers to trade that takes place through electronic means
   • Review Clause
     • In chapter 34 is the revision clause
       • The T-MEC will be valid for 16 years, with the possibility of being extended
       • As of the sixth year after the entry into force of the Agreement, a review of the T-MEC will be carried out by the Free Trade Commission