The US-Mexico-Canada Agreement, or USMCA, is a trade agreement between the United States, Mexico, and Canada that replaced the North American Free Trade Agreement (NAFTA). The USMCA was signed on November 30, 2018 and went into effect on July 1, 2020, after being ratified by all three countries.

The main focus of the USMCA is to modernize and improve NAFTA, which had been in effect since 1994. The agreement includes provisions related to labor, the environment, intellectual property, and agriculture.

One of the biggest changes in the USMCA is related to the automotive industry. Under NAFTA, automakers could import parts from any country without paying tariffs as long as a certain percentage of the vehicle`s content was made in North America. The USMCA increases the required percentage of North American content and requires that a certain percentage of the content be made by workers earning at least $16 an hour. This is intended to incentivize automakers to keep jobs in North America rather than moving them to countries with cheaper labor.

The USMCA also includes updated provisions related to digital trade, which was not a major factor in NAFTA. This includes protections for intellectual property related to digital products, as well as rules around cross-border data flows and data localization.

Additionally, the USMCA includes a “sunset clause” that requires the agreement to be reviewed every six years to determine whether it should be extended or modified. The agreement can be extended for another 16 years if all three countries agree.

Overall, the USMCA aims to improve and modernize the trade relationship between the United States, Mexico, and Canada. While some critics argue that it does not go far enough in addressing labor and environmental concerns, many see it as an improvement over NAFTA and a positive step forward for North American trade.