What Is the Difference between the USMCA and ASEAN?
While many people associate the USMCA and ASEAN with similar concepts, there are fundamental differences. Come take a look at our article to see what they are.
Although the USMCA and ASEAN may appear to be similar concepts, there are significant differences. Let’s take a look.
What Is USMCA?
The USMCA stands for "United States-Mexico-Canada Agreement." It is a free trade agreement between the three nations, and it replaced the North American Free Trade Agreement (NAFTA) in 2020.
However, it is not the same as NAFTA. While the USMCA also aims to eliminate trade barriers as NAFTA did, it takes additional measures to address key issues that were some of the pitfalls of NAFTA.
What Is a Free Trade Agreement?
The overall goal of free trade agreements is to facilitate trade between nations and reduce export risks. Such agreements aim to make international trade easier by eliminating tariffs, streamlining policies around shipping, clearing, and forwarding policies, or establishing rules for risk management in global trade or even tools like digital cargo transactions.
One of the main differences between the USMCA and NAFTA is that the USCMA addressed issues such as U.S. job losses in the automobile industry, rules surrounding e-commerce, and intellectual property rights. The USMCA also has some pros and cons for Mexico.
What Distinguishes the USMCA from ASEAN?
The USMCA differs from ASEAN, which stands for the Association of Southeast Asian Nations, because the ASEAN is a political union and not "just" a free trade agreement. It heavily emphasizes trade issues but covers many more issues as well.
The ASEAN is also a union to foster social progress, cultural development, and peace in Southeast Asia. It promotes cooperation in security, the military, and education. The goal is to grow into a more united bloc, similar to the European Union (EU), whereas the USMCA is mostly focused on trade relations.
However, because the association involves ten member countries and not just three, reaching an agreement on certain issues can be more difficult at times. For example, the geopolitical ties some of the member states have to China is often an issue of controversy.
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