The United States – Mexico – Canada Agreement (USMCA) is the updated North American Free Trade Agreement (NAFTA) that was renegotiated during the Trump administration.

The USMCA was signed in March 2020 and was ratified in July 2020

The USMCA is important for digital trade. After the delays in the TPP, the USMCA became the most significant regional trade agreement to be ratified with a digital trade chapter.

Key issues

In terms of its statutes, the USMCA largely follows the agendas set by the TPP. It uses this agreement as a template for its rules on digital trade.

A number of key differences can be highlighted:

Digital trade – Previous agreements involving digital trade have included rules in chapters called “Electronic commerce”. This is the first agreement where a chapter is called “Digital trade”.

This is largely symbolic, but cements the idea that trade rules being created move beyond only E-commerce to broader issues of concern around digital and data

Expanding source code rules – Clauses that prevent national rules on forced source code disclosure also included additional wording around algorithms in the USMCA.

This represents an important and controversial expansion as algorithms become more central to operation of platforms and systems.

Intermediary liability – Clauses explicitly set out how liability regimes for information providers should be set up in these countries. These followed US norms on intermediary liability.

Ironically, shortly after ratification of the USMCA, Trump launched executive orders on intermediary liability (Section 230) in the US which may violate this clause.