The United States-Mexico-Canada Agreement: Developing Trade Policy for Digital Trade

Abstract

This paper analyses how the United States-Mexico-Canada Agreement (USMCA) supports digital trade and cross-border data flows, while also giving governments the scope to restrict data flows to achieve legitimate regulatory objectives. The USMCA has made significant progress developing rules for digital trade, yet more is needed.  In particular, trade policy needs to address the drivers behind the significant growth in restrictions on digital trade by supporting the development of international standards and encouraging international regulatory cooperation as well as good regulatory practice. This paper outlines the key USMCA rules that are applicable to digital trade and analyses what more is needed to support digital trade and data flows consistent with domestic regulatory objectives.