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Nevada Exporters Face New Rules As USMCA Trade Deal Takes Affect

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(AP Photo/Pablo Martinez Monsivais)

President Donald Trump, Canada's Prime Minister Justin Trudeau, right, and Mexico's President Enrique Pena Nieto, left, participate in the USMCA signing ceremony, Friday, Nov. 30, 2018 in Buenos Aires, Argentina.

A new North American trade deal went on the books Wednesday.

The U.S.-Mexico-Canada Agreement, typically shortened to USMCA, now governs much of the trade among the three nations.

The agreement replaces the 30-year-old NAFTA accord and includes more protection of intellectual property and lowers cross-border shipping costs for some small businesses.

USMCA also does away with Canadian dairy market protections, which could be good news for the 7,500 Nevadans kept employed by the state’s 20 dairy farms.

“It really makes this a 21st Century free trade agreement that three major countries – the U.S., Mexico and Canada – are involved in together. That represents a mass continent and a massive global market,” said Zaib Shaikh, consul general of Canada.

Shaikh is based in Los Angeles and provides services to Southern California and Arizona as well as Nevada. He said one of the biggest changes the agreement makes is the area of digital commerce. 

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When NAFTA was signed, the Internet and e-commerce were barely getting started. Shaikh said USMCA covers that vibrant part of the economy from large online companies to small mom-and-pop retail operations with an online store.

Shaikh said after years under NAFTA people have become complacent to its benefits, but without an agreement, much of the business between the countries would have been stymied.

“But when trade deals don’t exist neither does that kind of import/export, neither does that tourism and neither does that spend desire that happens between places and so what’s important is that there is an agreement in place and that it will continue this amazing business relationship that not everyone is really aware of but Canada and Nevada have an incredibly important economic relationship,” he said.

Perhaps most importantly, Shaikh said the agreement creates a feeling of confidence that is needed right now.

“Ultimately, the biggest advantage it gives is that it gives some predictability and certainty, and in this day and age… certainty is needed,” he said.

Pawel Pietrasienski is the director of international trade for the Governor's Office of Economic Development.

He said the agreement opens doors for Nevada companies.

“Basically, those opportunities lies within the USMCA agreement those opportunities lie basically for small and medium-sized companies from Nevada… this agreement is not only giving the confidence that the consul general mentioned but also giving a lot of protection and a lot of opportunities, which haven’t existed before,” he said.

Peitrasienski said established businesses and new technology companies will be able to benefit from the new rules and reduction in red tape brought about by the USMCA going into effect.

Kim Daniels is the vice chairperson of the Nevada District Export Council, a group that includes higher-ed institutions like UNLV and UNR, several consulting companies and local manufacturers.

She said one benefit that small businesses will notice right away is the elimination of paperwork.

“They no longer require certificates of origin. That is a big deal because it can be very convoluted to try to get a certificate of origin,” she said.

The rules governing fair labor practices will also create a more level playing field for manufacturers. For instance, the minimum wage for automotive manufacturing will be set at $16 an hour under the agreement, Daniels said.

There are also new protections for intellectual property. Daniels said that will allow tech companies to share information with counterparts in Canada and Mexico without fear.

“We will that ability to continue to innovate without worry about our stuff being stolen,” she said.

Daniels doesn't see any downside to the document for Nevada directly. Instead, she sees it as a way to keep three interconnected countries together.

"If you’re looking at the ability to keep countries that are friendly - friendly – one thing that USMCA does is prevent the players from getting involved in other trade agreements,” she said.

Under the agreement, for example, Mexico can not get involved in China's Belt and Road Initiative.

Guests

Zaib Shaikh, consul general, Canada; Pawel Pietrasienski, director of international trade, Governors Office of Economic Development; Kim Daniels, vice-chairperson, Nevada District Export Council

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