NAFTA 2.0 comes into effect from 1st July 2020

A new free trade agreement between the United States, Mexico, and Canada comes into effect from 1st July 2020 onwards. It replaced the earlier 26 years old free trade agreement between the three countries- North America Free Trade Agreement (NAFTA). The new free trade agreement has been ratified by all three countries.

All three signatories of the new trade agreement have referred it by different names, United States called it USMCA- the United States Mexico Canada Agreement, while the Canadian Government has referred to as CUSMA, in Mexico by T-MEC.

NAFTA 2.0 is not a wholly new agreement, it is a renegotiated version of the earlier NAFTA agreement with certain changes, hence it has been referred to as NAFTA 2.0.


During the 2016 Presidential Election Campaign, United States President Donald Trump has announced and promised he would renegotiate the NAFTA free trade agreement with Mexico and Canada, and if the renegotiations fail, we would pull out of the NAFTA agreement.

The renegotiations with largely focusing on ‘Steel and Aluminum Tariffs’ between the United States and Canada begin in August 2017. NAFTA 2.0 was signed by the Head of the States of the three countries on the sideline of the 2018 G20 Summit in Argentina. A year later a revised version of the deal was signed on 10th December 2019 before being ratified by the three countries.