It was a very interesting read! I am very pleased to hear that the updated USMCA contains higher environmental and labour standards, as this has been an important industrial issue for many years. As noted at the end of this article, the U.S. textile and apparel industry does not use the benefits of NAFTA as often as it should because of restrictive rules and documentation requirements. Do you think that means that NAFTA will slowly disappear in the future? Why not? Protection of the U.S. textile industry has increased under the USMCA, Gantz said. «The USMCA advises against relying on low-cost substances from Asia and tariffs on non-native yarns and fabrics (`preferential tariff levels` or TPL) are limited to 10% in volume volume of North American clothing in order to receive duty-free treatment,» Gantz wrote. «In addition, other amendments under the USMCA require that sewing threads, pocket fabrics, narrow elastic bands and coated material used in apparel manufacturing be manufactured in North America so that these products are treated as original products and are therefore subject to duty-free processing.» Canada`s interest in renegotiating NAFTA – which has been seen as a generally positive economic engine for the country – was primarily related to U.S. threats to withdraw from NAFTA, as well as the imposition of U.S. tariffs on steel and aluminum imports, and U.S. threats to impose tariffs on cars and auto parts.

Following the negotiations, Global Affairs Canada stated that while the new agreement includes some offsets, including rules of origin for automobiles, that could increase production costs, but that it «will benefit overall from the significant benefits of NAFTA, modernize the disciplines of the agreement and facilitate preferential access for Canadian companies to the U.S. and Mexican markets.» Third, USITC suggested that changes to the USMCA in the textile and apparel sector would more or less balance and that the USMCA would not significantly affect the overall rate of use of the USMCA`s duty-free provisions. In particular, the underutilization of free trade agreements (ATFs) by U.S. companies in the purchase of clothing has long been a problem. Data from the Office of Textiles and Apparel (OTEXA) show that of the $4.163 million in total apparel imports from the NAFTA region in 2019, approximately $3,742 million (or 89.9%) tariff preferences granted under the agreement. As noted in the U.S. Fashion Industry Benchmarking, some U.S. fashion companies do not claim tax savings primarily because of roo restriction and documentation requirements. A similar report by the Canadian government on economic impact, written in February 2020, estimated that the implementation of the agreement would guarantee a GDP gain of CAD 6.8 billion (US$5.1 billion) for Canada, which would have been lost if the United States had left NAFTA without another agreement. The report also estimates that the new agreement provides 38,000 Canadian jobs. The updated usmCA, which began on July 1, has many positive changes that should make all parties happy enough.

As far as the economic impact is concerned, it now has a generally balanced agreement for both the textile and clothing sectors, starting with the debate on the rules of origin. Similarly, the changes to LPDs will not have a major impact on trade flows, as the largest change comes from U.S. exports of cotton and chemical fibres to Canada. This update is also important because it will help balance the support of textiles and clothing with its duty-free provisions. The USITC report also indicated that U.S. production exports would record the largest percentage increase in the USMCA and, although the new agreement has a positive impact on employment in the