USA – Mexico – Canada Agreement (USMCA)

North America's Trade Triangle

The United States–Mexico–Canada Agreement (USMCA) is a regional free trade agreement (FTA) between the three largest economies in North America. It entered into force in 2020, replacing the earlier NAFTA (1994).

USMCA modernises trade relations across sectors – including digital trade, labor rights, environmental protection, and maritime commerce – reflecting the realities of 21st-century logistics and supply chains.

Maritime Trade Across North America

The three USMCA countries share vast coastlines and major seaports:

🇺🇸 U.S. ports like Los Angeles, Houston, New York
🇲🇽 Mexican ports like Veracruz, Manzanillo
🇨🇦 Canadian ports like Vancouver, Halifax, Montreal

Though most North American trade moves by truck and rail, maritime transport remains vital for:

• Bulk cargo (agriculture, energy, raw materials)
• Containerized goods
• Intermodal freight
• Intra-regional shipments between Gulf and Pacific ports

Key Maritime and Trade Features

1. Customs Cooperation

• Promotes transparency, electronic processing, and faster clearance
• Encourages mutual recognition of inspections and risk management systems

2. Labor Standards in Transport

• Protects seafarers and port workers under improved labor provisions
• Includes enforcement mechanisms to ensure fair conditions

3. Environment and Sustainability

• Addresses marine pollution, endangered species, and port emissions
• Encourages sustainable logistics in coastal regions

4. Digital Trade Facilitation

• Enhances e-documentation and tracking – important for container shipping and port-to-port integration

Regional Benefits

USMCA fosters:

• Stronger regional supply chains
• Shared standards in customs, safety, and transport
• More predictable cross-border maritime procedures
• Investment in port infrastructure and coastal trade resilience

Maritime Exceptions: The Jones Act

While USMCA covers many trade areas, maritime cabotage (domestic coastal shipping) is exempt due to national laws like the U.S. Jones Act, which restricts domestic shipping to U.S.-built and operated vessels.

Still, the agreement facilitates international maritime cargo, especially via multimodal connections.

A Platform for Evolving Trade

USMCA balances tradition and transition. It keeps the core trade flows stable, while building in mechanisms for cooperation, reform, and sustainability – reflecting the shifting tides of North American trade.

Reflection Question

Why does a trade agreement like USMCA need to address both environmental and labor standards in maritime logistics?