Ralph H. Folsom - The USMCA, NAFTA Re-Negotiated and Its Business Implications in a Nutshell

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Professor of Law Emeritus, Pepperdine University
Professor of Law Emeritus, University of California, Los Angeles

A. Benjamin Spencer

Justice Thurgood Marshall Distinguished Professor of Law
University of Virginia School of Law

James J. White

Robert A. Sullivan Professor of Law Emeritus
University of Michigan

The USMCA

NAFTA Re-Negotiated and its Business Implications

In a nutshell

Sixth Edition

Ralph H. Folsom

Professor of Law, University of San Diego

W. DAVIS FOLSOM

Distinguished Professor of Economics, University of South Carolina Beaufort

The publisher is not engaged in rendering legal or other professional advice, and this publication is not a substitute for the advice of an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.

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Preface

NAFTA 1994 and its re-negotiated 2018/2019 successor, the USMCA, remain essential to business operations in North America. No lawyer or business person in Canada, Mexico or the United States can escape the significance of these free trade agreements. They blend national legal and business cultures and traditions.

One issue is what to call the new trilateral North American agreement. The Trump administration prefers the name United States-Mexico-Canada Agreement (USMCA). Canada prefers New NAFTA and/or CUSMA in English or ACEUM in French. Mexico calls it T-MEC in Spanish. For purposes of this book, we generally call the 2018/2019 agreement the USMCA.

In many ways, NAFTAs arrival in 1994 was a watershed moment for international trade. NAFTA law and its business impact greatly influenced a host of other free trade agreements around the globe. See R. Folsom, Free Trade Agreements: From GATT 1994 through NAFTA Re-Negotiated (West Academic Publishing). The USMCA in turn is influencing U.S. trade negotiations with the EU, Japan and others.

We initially collaborated with pleasure on Understanding NAFTA and Its International Business Implications , an interdisciplinary publication written just after NAFTA 1994 came online. A professional book, NAFTA Law and Business followed thereafter.

It has been a genuine pleasure to jointly prepare this Nutshell on The USMCA, NAFTA Re-Negotiated and Its Business Implications . In it, we attempt to evaluate NAFTAs impact since its inception, as well as the future implications of its re-negotiation.

We hope that students, lawyers, government officials and people in business will find this Nutshell a useful introduction. In preparing it, we have attempted to address the interests not only of North Americans, but also persons located outside the region who are concerned about the externalities of USMCA trade, technology and foreign investment law.

Following the established Nutshell style most citations are omitted. This style creates a book that reads easily and has been widely used in law and business schools. Selected Internet citations have been provided throughout and in the Web Resources index that follows this Preface.

For a global Nutshell on trade law and policy, see R. Folsom, International Trade Law including Trump and Trade . Your comments and suggestions concerning any of these books are most welcome.

Ralph H. Folsom
rfolsom@sandiego.edu

W. Davis Folsom
davisfolsom@gmail.com

San Diego and Beaufort, 2020

Acknowledgments

Ralph wishes to thank his brother Davis for extensively tutoring him on the economics and business impact of NAFTA 1994 and USMCA 2018/2019. This tutoring opened many doors of understanding. Davis wishes to thank Ralph getting him started on book publishing and trying to present legal matters in plain English.

Lastly, we very much appreciate the outstanding support of West Academic Publishing.

Professor Ralph Folsom has also authored the Nutshells on:

European Union Law including BREXIT

International Trade Law including Trump and Trade

Foreign Investment Law including Investor-State Arbitrations

International Business Transactions (co-author).

Web Resources

U.S. Government Resources:

https://ustr.gov/trade-agreements

NAFTA 1994 Secretariat:

www.nafta-sec-alena.org/

NAFTA 1994 Investor-State Arbitrations:

www.naftaclaims.com

www.state.gov/s/l/c3439.htm

North American Agreement on Labor Cooperation (NAALC, 1994):

https://www.dol.gov/agencies/ilab/trade/agreements/naalcgd

North American Agreement on Environmental Cooperation (NAAEC,1994):

www.cec.org

USMCA:

https://ustr.gov/trade-agreements

Outline

Trade Deficits, Current Account Balance, and
Trade Balance

Perfect and Not So Perfectly Competitive
Markets

Core CommitmentsFederalism, Supremacy
and Nondiscrimination

Product and Service Standards-Related
Measures (SRM)

Treatment of Foreign Investors and
Investments

Arbitration of Foreign Investor-State
Disputes

Arbitration Procedures, Appeals and
Remedies

Standards of ReviewJudge Wilkey
Dissents

The 1994 Side Agreements on
Labor and the Environment

The North American Agreement on
Environmental Cooperation (NAAEC)

The Mexico-United States Border
Environmental Cooperation Agreement

NAFTA: Its Economic and
Business Impact

NAFTAs Impact on Trade, GDP and
Investment

USMCA Provisions with Little Change from
NAFTA

USMCA: Its Economic and
Business Implications

The Economic and Business Implications of
USMCA

Table of Cases

References are to Pages

Anheuser-Busch Brewing Assn v. United States, 48

Arbitration between Thunderbird Gaming Corp. v. United Mexican States, In re, 194

Bestfoods v. United States, 123