The President has signed the United States Mexico Canada Agreement (USMCA) trade deal in a ceremony that took place at the White House today. The USMCA replaces the nearly 25-year-old trade deal North American Free Trade Agreement (NAFTA).
A few highlights of significant changes in the new deal include:
- Automobiles must have 75% of components manufactured in North America countries to be tariff-free as opposed to NAFTA rate of 62.5%;
- Forty to 45% of automobile parts must be made by workers who earn at least $16 an hour by 2023;
- Increased access for U.S. agriculture market; and
- Stricter regulations on intellectual property and digital trade guidelines.
While the deal mainly addresses issues in the automobile manufacturing and agriculture industries, several organizations in the automotive sector have expressed their approval of the deal.
Already approved by both U.S. and Mexican officials, the deal is set to take effect later this year after the Canadian government approves.
According to an article from Reuters, Canadian Prime Minister Justin Trudeau is urging the country’s parliament to pass the deal quickly, but opposition from the main Conservative party may delay approval until April this year.