What is the United States-Mexico-Canada Agreement?

The United States-Mexico-Canada Agreement (USMCA) is an updated version of the nearly 25-year-old, trillion-dollar North American Free Trade Agreement (NAFTA). It includes major changes on cars and new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions. The USMCA entered into force on July 1, 2020. In 2018, Wyoming exported $270 million in goods to Canada and Mexico.

Here is a brief overview of a few key achievements:

Rules of Origin

Exporters are no longer required to complete a formal certificate of origin. Certification of origin can be achieved using informal documentation — such as commercial invoices — and can be completed by the importer, exporter, or producer.

Financial Services

The USMCA facilitates a level playing field for U.S. financial institutions, investors, and investments in financial institutions and cross-border trade in financial services.

Intellectual Property

The USMCA extends the terms of copyright to 70 years beyond the life of the author (up from 50). It also provides the most robust protection of trade secrets than any prior U.S. trade agreement.

Digital Trade

The USMCA includes new provisions to deal with the digital economy — such as prohibiting duties on things like music and e-books — and protections for internet companies so they’re not liable for content third-party users produce.

Small Business

The USMCA eliminates local presence requirements for cross-border service providers, benefitting small businesses by removing the unnecessary burden of opening a foreign office as a condition for doing business.

De Minimis

The threshold within which low-value goods can enter each country duty-free has increased. This is a significant outcome for U.S. small- and medium-sized enterprises. The De Minimis thresholds under the USMCA are:

  • Canada – $150 CAD for customs duties and $40 CAD for taxes.
  • Mexico – $117 USD for customs duties and $50 USD for taxes.


Canada provides new access for dairy products including fluid milk, cream, butter, skim milk powder, and cheese. It also eliminates tariffs on whey and margarine. The USMCA prohibits labeling and certification barriers for the trade of wine and distilled spirits.


The USMCA makes new enforceable labor standards a core part of the agreement. This will help level the playing field for American workers and improve wages and labor conditions in North America.

Help is Available

To learn more about the USMCA, fact sheets can be found on the Office of the United States Trade Representative website. For assistance with your international trade plan development, visit the Wyoming SBDC Network website and register for no cost, confidential business advising by clicking here.

About the author: John provides business advising services to Wyoming small business entrepreneurs. His work experience spans the mining, manufacturing, information, financial, and retail industry sectors. He has held corporate management positions in product development and international marketing and managed foreign operations offices. John has been a Series 7 qualified general securities representative and a small business owner in information technology and retail start-up companies.

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