The revamped North American trade pact President Trump signed Wednesday stands to help American auto workers, dairy farmers and internet retailers.
The replacement for the 25-year-old North American Free Trade Agreement, or NAFTA, aims to keep manufacturing in the US, give American dairy farms a fresh batch of Canadian business and limit the burden of tariffs and duties on digital commerce.
The House passed the new US-Mexico-Canada Agreement last month after more than two years of negotiations with the other two nations, and the measure easily cleared the Senate two weeks ago. It has already won approval in Mexico but Canada still must ratify it before it can take effect.
“Together we are building a glorious future that is raised, grown, built and made right here in the glorious USA,” Trump said Wednesday at a White House ceremony.
Trump vowed to renegotiate NAFTA, which sparked an explosion in trade between the three countries after it took effect in 1994 but also drew criticism for encouraging American firms to move manufacturing to Mexico, where labor is cheaper.
The new pact, known as the USMCA, seeks to stanch such outsourcing, particularly in the auto industry.
Carmakers have to get three-quarters of their automotive content from within North America to qualify for duty-free treatment under the deal, up from NAFTA’s 62.5% threshold.
And at least 40% of their cars have to be made by workers paid at least $16 an hour — or else face US tariffs on the vehicles.
Those provisions stand to benefit American and Canadian automakers but could hurt their foreign counterparts, who could be forced to build engine or transmission plants in the US or Canada.
The pact will also give American dairy farmers access to roughly 3.5% of the $16-billion-a-year dairy market in Canada and allow the US to export more milk products up north.
Canada will maintain the bulk of its so-called supply management scheme, which imposes steep tariffs on dairy products imported there. But the country — the US’s largest food and agricultural export market — will set new quotas for dairy imports exclusively for the states, according to the Office of the US Trade Representative.
The USMCA also includes a new chapter dedicated to digital trade. It bans customs duties on products such as e-books, software and music that are distributed electronically, and includes provisions to make sure data can be transmitted across borders, the trade rep’s office says.
The deal will also double the thresholds for customs declaration and duty collection on imports to $100 in Mexico and $30.25 in Canada, a provision expected to aid online retailers shipping between countries.
With Post wires
