Nafta Renegotiation And The Proposed United States-Mexico-Canada Agreement

59 Protocol replacing the North American Free Trade Agreement with the agreement between the United States of America, the United States of Mexico and Canada in (provided that entry into force replaces NAFTA (except in the USMCA) and triggers the end of the North American Labour Cooperation Agreement); See also the text of the USMCA, see 34, art. 34.5 (cross-references to protocol). The usmCA draft text established similar time rules for entry into force, but was not based on a separate protocol. See (archiving the draft text). The USMCA requires automakers to produce at least 75% of the vehicle`s components in Canada, Mexico or the United States. Previously, it was 62.5%. At least 40% of the value of a car and 45% of a light truck must be manufactured by workers who earn an average of $16 per hour. Cars that do not meet these requirements are subject to sales rates. The agreement protects Mexico and Canada from future U.S. tariffs on cars. On April 3, 2020, Canada informed the United States and Mexico that it had completed its national process of ratifying the agreement. [104] On December 19, 2019, the U.S. House of Representatives passed the USMCA with the support of all parties by 385 votes (193, Republicans 192) and 41 (Democracy 38, Republican 2, 1).

[79] On January 16, 2020, the U.S. Senate passed the trade agreement by 89 votes (Democrats 38, Republicans 51) to 10 (Democracy 8, Republican 1, Independent 1)[80] and the bill was forwarded to the White House for the signature of Donald Trump. [81] On January 29, 2020, Trump signed the agreement (Public Law No: 116-113). [82] NAFTA has been formally amended,[83] but not the 1989 Canada-U.S. Free Trade Agreement, which is only „suspended.“ [84] [85] In 2019, the United States imported $358 billion from Mexico. Mexico is the largest supplier of goods after China. The new agreement will not compromise the flow and price of these imports. These include oil, manufactured goods, fruits, vegetables, coffee and cotton. The only exception is auto imports. The USMCA is expected to have a very small impact on the economy. [108] An International Monetary Fund (IMF) discussion paper published at the end of March 2019 stated that the agreement would have a „negligible“ impact on the general economy. [108] [113] The IMF study predicted that the USMCA „would have a negative impact on trade in the automotive, textile and clothing sectors, while achieving modest welfare gains, mainly due to improved access to the goods market, with a negligible impact on real GDP.“ [113] The IMF study concluded that the economic benefits of the USMCA would be greatly improved if there was an end to Trump`s trade war (i.e., if the United States did so.