Mexico and Canada are the two largest export markets for the U.S. textile and apparel industry, with nearly $11.3 billion in 2019. In addition, the financial impact of the USMCA will be less noticeable than that of NAFTA, given that the latter agreement has already eliminated tariffs in most sectors. In a 2019 report, the U.S. International Trade Commission (USITC) predicted that the overall impact on U.S. GDP would likely be positive, but moderate, given that the increase in U.S. GDP would be equivalent to NAFTA estimates. However, the agency predicted that the USMCA would increase trade with the two USMCA partners by about 5% and a lower percentage with the rest of the world. As a result, U.S. trade with Mexico and Canada would account for a larger share of total U.S.
trade. The new textile provisions are stronger than NAFTA 1.0, both in terms of implementation and incentives for North American textile production. 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.” “USMCA creates more security in the Western Hemisphere and allows us to have a vision of how to continue to build the national textile platform and supply chain while having the confidence to reinvest,” said Cameron Hamrick, President of Hamrick Mills. “This trade agreement is making some improvements and we hope it will stimulate more investment in the Western Hemisphere. Now more than ever, it is time to have a strong regional supply chain in the Western Hemisphere. Greenwood Mills, a family-owned textile company in Greenwood, S.C., converted its production of jeans in a factory in Mexico to the production of non-medical face masks and hospital clothing.
In addition to paragraphs 8 to 16, the provisions of this agreement relating to preferential tariff applications, including the Section 6.6 review (verification), the Article 5.9 verification (origin verification) or the cooperation or enforcement measures covered by Chapter 7, Section B (Customs Management and Trade Facilitation) and the related provisions applicable to other textile and clothing products , also apply to these products. notwithstanding the fact that the products subject to a TPL are not original products and that, therefore, the original certification requirement under Article 5.2 (preferential treatment rights) does not apply. establishes a specific chapter on textiles, including the language of application of textile-specific tariffs. On the question of whether NAFTA is “perhaps the worst trade deal of all time,” as U.S. President Donald Trump has repeatedly said, or “full of continued growth in the U.S. economy and the growth of Canada and Mexico,” as the Embassy of Canada asserts, the agreement has had an undeniably significant impact on the three countries and the USMCA. When I was asked previously in Trial 2 what I would do if I were a trade negotiator for the controversial TPL waiver to NAFTA, I said I would reduce the amount of textiles and clothing from non-NAFTA regions.