What is USMCA?

The USMCA (United States-Mexico-Canada Agreement) is a trade agreement among the United States, Mexico, and Canada that took effect on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). It is an agreement aimed at promoting trade and economic development in the North American region, covering areas such as automotive manufacturing, agricultural products, labor standards, intellectual property rights, and e-commerce.

Key Features of USMCA:

1. Automotive Industry Regulations:
• Enhanced Rules of Origin: 75% of automobiles and parts must originate from North America (up from 62.5% under NAFTA).
• Labor Wage Requirements: 40% to 45% of automobile parts must be manufactured by workers earning at least $16 per hour, to raise wage levels and reduce low-wage competition.
2. Trade Liberalization:
• Allows 99% of goods to be imported and exported duty-free, promoting intra-regional trade growth.
3. Digital Trade and E-commerce:
• Provides better protection for intellectual property rights, prohibits tariffs on data transmission, and promotes cross-border e-commerce development.
4. Agriculture and Food Trade:
• Canada opens its dairy market to the United States, increasing the freedom of North American agricultural product trade.
5. Labor and Environmental Standards:
• Requires improvements in Mexican workers' rights, guaranteeing workers' rights to organize unions and negotiate.
• Strengthens environmental protection measures, reducing pollution and illegal fishing practices.

What are the Impacts of USMCA on Businesses?

• North American manufacturing is becoming more localized, attracting businesses to move supply chains back to North America, reducing reliance on Asia.
• Automotive industry costs are increasing (due to wage and origin requirements), but also promoting North American job opportunities.
• E-commerce and data trade are expanding, benefiting technology and digital industry development.

USMCA aims to strengthen North American economic competitiveness, promote fair trade, and protect labor and the environment, serving as an important economic and trade framework among the United States, Mexico, and Canada.

What Can CML Do For You?

CML is a manufacturer specializing in the production of hydraulic pumps and valves, including vane pumps, gear pumps, piston pumps, diaphragm pumps, and provides customized solutions to serve the global market.

Under the USMCA, the North American manufacturing industry is undergoing supply chain restructuring, particularly in the automotive industry. The agreement requires at least 75% of automotive parts to be produced in North America, and stipulates that 40% of the parts must be manufactured by workers earning at least $16 per hour.

CML can provide the following assistance in this context:

1. Supply High-Quality Hydraulic Components: CML's hydraulic pumps and valves can be used in automotive manufacturing equipment, assisting North American manufacturers to improve production efficiency and comply with USMCA's rules of origin.
2. Customized Solutions: To meet the needs of the North American market, CML can provide customized hydraulic systems to meet the technical requirements of different production lines.
3. Technical Support and Training: CML can provide technical support and training to North American customers to ensure the correct use and maintenance of products, and improve production efficiency.

Through these services, CML can help North American manufacturers adapt to the requirements of USMCA, optimize production processes, and enhance competitiveness.