Goodbye, NAFTA. Hello, USMCA.

Four years ago, Donald Trump promised to replace the "worst deal ever made" — known to the rest of us simply as NAFTA, the massive 1994 trade pact linking the US, Canada, and Mexico.

Now, he's officially done so. The new United States-Mexico-Canada Agreement (USMCA), which replaces NAFTA, comes into effect on July 1st.

How did we get here, and what does it mean?


Let's look back. NAFTA had a checkered history. On the one hand, it successfully integrated two of the world's most advanced economies (the US and Canada) with a developing one (Mexico), while boosting cross-border trade from $289.3 billion in 1993 to $623.1 billion in 2003, and lowering prices for most North American-made goods and services.

On the other hand, it resulted in net job losses and lower wages for many US factory workers. Coupled with the jobs that fled to China several years later, NAFTA came to be seen as part of the perfect storm of forces that clobbered American workers at the turn of the century.

Still, NAFTA was relatively popular in the US until less than a decade ago, when the economic wreckage of the financial crisis prompted more Americans to question the benefits of free trade in general, and NAFTA in particular. President Trump capitalized on that popular sentiment, pledging on the campaign trail to scrap NAFTA and replace it with something better. American views on free trade have improved dramatically since 2016, but the US is still deeply polarized on NAFTA.

So, is the UMSCA really a better deal? It depends on whom you ask. Here's the biggest issue that was on the table for each of the pact's three signatories and how it played out:

United States. Labor unions in particular are happy that the new trade deal raises minimum wages for workers who make goods covered by the deal. The US auto industry, for example, lobbied for USMCA to mandate that more of each vehicle be made by workers earning at least $16 per hour, in order to undermine the ability of lower-wage Mexican factories to take jobs from American workers.

On the other hand, vehicles made in North America will likely become more expensive for US consumers, as the new trade deal requires more of each automobile to be assembled from parts made in the US, Canada or Mexico — rather than in lower-cost Asian countries.

Mexico. Under the USMCA, Mexican workers will be less likely to get jobs outsourced from the US and Canada. But those who do find work will be entitled to better labor standards, including the right to unionize and to have their complaints investigated by UMSCA panels.

Canada. Canada won one big thing: the USMCA retains NAFTA's trade dispute settlement mechanisms, meaning that trade disputes with US companies will be settled by a multilateral panel rather than in a US court (as the Trump administration wanted). But the Canadian dairy industry, for one, is not happy about having to open the local market to US competition. No use crying over spilled milk now, though.

And what about Trump? Upon first glance, following through on a campaign promise to revisit a major trade deal is a big political win for the US president, who views trade as a zero-sum game and believes tariffs are the best way to resolve most trade disputes. It also reduces the pressure on Trump to move beyond his "phase one" deal with China — his main trade war opponent — before the November election.

However, a closer look reveals that the USMCA is more of a facelift than a complete do-over of NAFTA. Republican Senator Chuck Grassley once referred to the UMSCA as about 95 percent the same as NAFTA. And in the end Trump didn't get many items on his wish list, such as removing Canadian subsidies on lumber exports or scrapping Mexico's value-added tax on US imports.

Indeed, the UMSCA is often called NAFTA 2.0. The question now is, will we have to wait another 26 years for the next update?

In Italy, stacks of plastic boxes in supermarkets and stores are not garbage - they are collected and reused, thanks to a consortium that specializes in recycling them for food storage. How do these "circular" plastic boxes help reduce energy consumption and carbon dioxide emissions?

Learn more in this episode of Eni's Energy SUPERFACTS series.

Over the past few years, we've seen three major emerging powers take bold action to right what they say are historical wrongs.

First came Crimea. When the Kremlin decided in 2014 that Western powers were working against Russian interests in Ukraine, President Vladimir Putin ordered Russian troops to seize the Crimean Peninsula, which was then part of Ukraine. Moscow claimed that Crimea and its ethnic Russian majority had been part of the Russian Empire for centuries until a shameful deal in 1954 made Crimea part of the Ukrainian Soviet Republic. Americans and Europeans imposed sanctions on Russia. But Ukraine is not part of NATO or the EU, and no further action was taken.

More Show less

"Neither America first, which is ultimately America alone, nor America the world's policeman," Sen. Chris Coons told Ian Bremmer in describing VP Joe Biden's approach to foreign policy should he win the presidential election in November. In the latest episode of GZERO World with Ian Bremmer, Sen. Coons provides details of how U.S. relationships with foreign governments and multilateral alliances could change in a Biden presidency. He also defended President Obama's track record, saying "I think it is a mischaracterization of the Obama-Biden foreign policy for President Trump to say that we were picking up the tab and fighting the world's wars and that we were disrespected." Coons stated that Biden would work to restore U.S. involvement in alliances like NATO, and shore up global support to pressure China on labor and environmental standards. The exchange is part of a broad conversation with the Senator about COVID response and economic relief, Russian interference in elections, and the 2020 presidential race. The episode begins airing nationally in the U.S. on Friday, July 10. Check local listings.

Jon Lieber, managing director for the United States at Eurasia Group, shares his insights on US politics:

How is coronavirus jeopardizing the legitimacy of a 2020 presidential election?

Well, what coronavirus is doing is a lot of states are worrying about people who aren't going to want to come to the polling places in the fall, and they're worried about a shortage of polling workers who are going to want to come out and volunteer to get sick by interacting with a bunch people in person. So, what they're doing is they're looking at making a shift to vote-by-mail. Most states allow some form of absentee balloting today. Five states just automatically mail you a ballot and they don't do any in-person voting. But the challenge here is that a lot of states are unprepared for the sharp increase that's expected. In the last election, 25% of ballots were cast by mail. You may see 50, 60 or even more percent of ballots cast by mail this time, which could overwhelm election administration, which happens at the state level.

More Show less

The United States and the European Union have comparable population sizes, but their COVID-19 death toll trajectories have diverged. As of July 8, the average number of new deaths every three days in the EU had fallen 97 percent since peaking at the beginning of April. The US number, however, has fallen only 67 percent over the same period. That means that although both regions' death tolls peaked with only two weeks difference, the EU has flattened its COVID-19 fatality curve faster than America. Some experts attribute the difference to EU countries' more robust public health systems and better compliance with mask-wearing and other social distancing measures.