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July 1, 2020, 11:01 a.m. EDT

USMCA takes effect but North American trade tensions remain

Nafta’s replacement, a Trump administration priority, kicks in after years of negotiation even as certain matters have emerged to complicate its rollout

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By Josh Zumbrun

AFP/Getty Images
Then-Mexican President Enrique Pena Nieto, President Donald Trump and Canadian Prime Minister Justin Trudeau sign the U.S.-Mexico-Canada Agreement on the sidelines of the G20 Leaders’ Summit in Buenos Aires on Nov. 30, 2018.

The U.S.-Mexico-Canada Agreement kicks in Wednesday, but the culmination of years of negotiations won’t necessarily mean the end of trade tensions among the three North American nations.

Even as the deal formally takes effect, contentious issues that prolonged the negotiations are re-emerging as sore spots—including U.S. tariffs on metals, Mexico’s labor standards, Canada’s protection of its dairy market and new rules on automotive production.

“Trade agreements are by definition intended to provide order and certainty to the marketplace, but the USMCA is already stirring up controversy,” said Jessica Wasserman, a partner at Greenspoon Marder LLP in the international trade practice. “The Trump administration trade negotiation approach has been to keep everyone guessing and never reach closure, so maybe it is not surprising that there is so much left unresolved.”

An expanded version of this story is available at WSJ.com .

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