Much of the trade between the United States and its NAFTA partners is related to production sharing, as each country`s producers work together to create goods. The expansion of trade has led to the creation of vertical supply relationships, particularly along the U.S.-Mexico border. The flow of inputs produced in the United States and exported to Mexico and the return of finished products have significantly increased the importance of the U.S.-Mexico border region as a production site.57 U.S. manufacturing industries, including automotive, electronics, appliances and machinery, all require the support of Mexican manufacturers. One report estimates that 40% of the content of U.S. imports from Mexico and 25% of the content of U.S. imports from Canada are of U.S. origin. In comparison, U.S. imports from China are expected to have only 4% U.S. wages. In total, products from Mexico and Canada account for approximately 75% of the total domestic content of the United States, which enters the United States as imports.58 As part of the agreement, Canada agreed to provide increased access to its dairy market and obtained several concessions in exchange for several concessions. The USMCA will retain Chapter 19, which Canada relies on to protect it from U.S.
trade assistance. It has also avoided a proposed five-year expiration clause, but uses a 16-year delay with a review after six years. Overall, Canada has become more dependent on trade with the United States and has based its southern neighbour on 75 per cent of its exports. Other high-income countries tend to be much more diverse and rarely rely more than 20% on a single partner. U.S. presidents have long,s warm relationships with Canadian prime ministers, but Mr. Trump has not hesitated to use that dependency as leverage. As part of the USMCA talks, he threatened to impose new tariffs on Canadian auto parts if Ottawa did not accept trade concessions.
The Clinton administration negotiated an environmental agreement with Canada and Mexico, the North American Environmental Cooperation Agreement (NAAEC), which led to the creation of the Commission for Environmental Cooperation (CEC) in 1994. In order to allay concerns that nafta, the first regional trade agreement between a developing and two developed countries, would have negative effects on the environment, the Commission was tasked with carrying out an ex post-post environmental assessment it created one of the first ex-post frameworks for the environmental assessment of trade liberalization, which was to provide a certain amount of evidence regarding the initial assumptions concerning NAFTA and the environment. , such as the fear that NAFTA could create a “race to the bottom” of environmental regulation between the three countries or that NAFTA would put pressure on governments to strengthen their environmental protection.  The CEC organized four symposiums on assessing the impact of NAFTA on the environment and requested 47 contributions from leading independent experts on the subject.  After joining the GATT, the Mexican government adopted the final decree in 1989 that liberalized industry rules but did not completely remove them.