On Monday, August 27, President Trump announced that he intends to terminate NAFTA if discussions with Canada are not finalized by the end of the week.  This news follows the successful negotiation of an agreement in principle for trade between the U.S. and Mexico.  While, according to the USTR, the agreement provides the “most comprehensive set of enforceable environmental obligations of any previous United States agreement,” the deal also contains numerous provisions of note involving trade.

The agreement in principle is expected to contain a more robust intellectual property (“IP”) chapter than that of its NAFTA predecessor.  In fact, the USTR is calling the chapter the “most comprehensive” for enforcement of IP with any trade agreement to which the U.S. is a party.  In particular, among other provisions, enforcement authorities must be able to stop the entry or exit of goods that are suspected to be pirated or counterfeited, the countries must establish “meaningful” criminal penalties for the camcording of movies, the countries will require national treatment for copyright, and both countries will make available civil and criminal remedies for the theft of trade secrets. 

The bilateral deal incentivizes businesses in the automotive and textile industries to conduct work in the U.S. and Mexico.  In particular, the agreement in principle includes language that has been contemplated in the NAFTA negotiations and requires that 75 percent of automobile content be made in the United States and Mexico.  In addition, the deal will require that 40-to-45 percent of the contents of automobiles be made by workers earning at least $16 per hour.

The two countries reached a number of agreements on agricultural trade as well.  Among these agreements is a commitment to “enhance transparency for opposition and cancellation proceedings” with regard to geographical indications.  The two countries agreed not to “restrict market access in Mexico for U.S. cheeses labeled with certain names.”  The contemplation of cheese is due, in part, to the agreement in principle between Mexico and the EU that was reached in April of this year.  The U.S. and Mexico also agree to protect a common list of “proprietary food formulas.”