The North American Free Trade Agreement (NAFTA) is a trilateral agreement signed by Canada, Mexico, and the United States that came into force on January 1, 1994. The agreement created the largest free trade area in the world and removed tariffs on goods traded between the three countries.

The NAFTA agreement created a framework for trade between the three countries, eliminating barriers to trade and investment, facilitating the movement of goods and services, and promoting economic growth. However, it has been a controversial issue in the United States, with critics arguing that it has resulted in job losses, deindustrialization, and trade imbalances.

The United States-Mexico-Canada Agreement (USMCA) is a renegotiation and update of NAFTA, signed on November 30, 2018, which modernizes the agreement and incorporates new provisions addressing trade in the digital economy, labor, and the environment. The USMCA was ratified by the three countries in 2020 and entered into force on July 1, 2020.

One of the key changes in the USMCA is the inclusion of the United States-Mexico-Canada Agreement Trade Secretariat (USTS), which oversees the implementation and enforcement of the agreement. The USTS is an independent body that provides a forum for the resolution of disputes between the three countries.

The USMCA also includes new provisions on labor rights, requiring Mexico to improve its labor standards and allowing for the suspension of trade benefits if the country fails to comply. The agreement also includes new rules of origin for the automotive sector, requiring a higher percentage of North American content and a higher minimum wage for workers.

Another important change is the inclusion of a sunset clause, which requires the agreement to be reviewed and renewed every 16 years. This ensures that the agreement remains up-to-date and relevant to the changing needs of the three countries.

Overall, the USMCA represents a modernization and improvement of the NAFTA agreement, providing new provisions and protections for workers, the environment, and trade in the digital economy. It is expected to promote greater economic growth and stability in North America, while also addressing some of the concerns that have been raised by critics of the original NAFTA agreement.