Still Much Legal Work Ahead as New North American Free Trade Agreement Advances
Clients will seek guidance to comply with rules of origin, labor and other commitments.
January 31, 2020 at 04:24 PM
4 minute read
The long road to a new North American trade deal continues to promise plenty of work for lawyers, especially now that the United States-Mexico-Canada Agreement has been signed into law.
After many months of tedious negotiations, the U.S. Senate approved the USMCA on Jan. 16 and President Donald Trump signed it into law Wednesday, paving the way for a pact to replace the decades-old North American Free Trade Agreement. Pending approval by Canada, the trade accord could enter into force as soon as this summer.
Adriana Ibarra-Fernandez and Jose Hoyos-Robles, both partners in the international commercial and trade group for Baker McKenzie in Mexico, expect an increase in work as companies prepare for the changes that come with the new agreement.
That means potentially different forms of legal counsel, including confirmation of compliance with rules of origin, reconfiguration of supply chains and analysis of opportunities that will result from the agreement.
More than anything, the Baker McKenzie lawyers anticipate greater emphasis going forward on compliance related to customs and trade issues, and also with the new labor legislation in Mexico. Those labor rules, such as commitments to collective bargaining and other rights aimed at boosting wages, helped nudge U.S. legislators toward approval of the trade pact.
Authorities of all three countries could also initiate panels that will relate to compliance with labor laws once the agreement is in force.
During the first years of the USMCA, the Baker McKenzie team is prepared for a transition period during which trade lawyers and the business community will need to abide by the provisions of the new and old agreements simultaneously.
Government auditors of the three countries will carry out verifications of origin under both agreements to ensure that goods meet the rules of origin applicable at the time of export. This alone will certainly generate more work for trade lawyers, they said.
For many years, NAFTA and other free trade agreements in place focused mainly on trade-related issues.
The USMCA, however, will require that lawyers are able to advise their clients in areas such as intellectual property, information technology, labor and environmental laws. This could result in more specialized professionals that can strategize beyond mere trade and customs issues.
Celine Crowson, head of the intellectual property practice for the Americas at Hogan Lovells, says the agreement contains provisions that shine a light on intellectual property protection and enforcement—and that could improve business confidence in North America.
Trade in counterfeit goods is widespread in Mexico, where outdated intellectual property laws lack enforcement. The American Chamber of Commerce estimates that knockoff goods in Mexico cost companies more than $2 billion a year in lost revenue.
Now, lawyers expect the trade agreement could spur legislation to combat piracy.
"The USMCA in many ways was designed to promulgate U.S. intellectual property laws globally, so the legal changes will primarily occur in Canada and Mexico," Crowson said.
The updated trade accord provides a number of new provisions relating to trade secret protection, patents and trademarks—essentially bringing the regional trade agreement into the modern age. Intellectual property obligations are a frequent source of implementation complications and delays.
Since intellectual property issues are often global in nature, the USMCA could generate work for lawyers in multiple jurisdictions as clients seek analysis and advice on how the agreement could affect their businesses in other major markets.
At the same time, Crowson says enhanced intellectual property protections across North America could encourage companies to do cross-border business in those jurisdictions—places that she says will now have the will and procedures in place to protect intellectual property.
The Baker McKenzie trade team in Mexico expects that implementation of the USMCA should be fairly simple, since the accord is essentially a modernization of NAFTA. But some of the more impacted parties, such as the automotive industry, may take additional time to get used to the new reality and meet the new rules.
The way Baker McKenzie sees it, the USMCA is intended to create a more robust trade bloc—one that is able to compete with Europe and Asia. The three countries need to think as a trade bloc and not seek benefits only for their own country, the trade lawyers in Mexico said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllKPMG's Bid To Practice Law in US On Hold As Arizona Court Exercises Caution
Combative Arguments at EU's Highest Court Over Google's €4.13B Antitrust Fine Emphasize High Stakes and Invoke Trump
4 minute readLaw Firms 'Struggling' With Partner Pay Segmentation, as Top Rainmakers Bring In More Revenue
5 minute readLaw Firms Mentioned
Trending Stories
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250