Trump: ‘Historic’ pact will rebalance trade with Canada, Mexico
The United States reached a landmark trade deal with Canada and Mexico that President Trump says will allow American farmers and ranchers to export far more products, help rebuild the auto industry and boost manufacturing.
The deal would replace the 24-year-old North American Free Trade Agreement (NAFTA) with a new pact called the United States-Mexico-Canada Agreement (USMCA) to keep trade duty-free but on much fairer terms, Trump says. It requires Congress’ approval.
The three neighbors already trade $1.2 trillion worth of goods and services a year, making the area the world’s largest regional market.
It is “truly historic news for our nation and indeed for the world,” the president said in the Rose Garden on October 1, and “a terrific deal for all of us.”
He says it will open up more markets for U.S. farm products and create new jobs in the auto industry and for other manufacturers.
Under the old deal, other countries could make parts, ship them to Mexico for final assembly and qualify to sell the autos duty-free in the United States, he says. The new pact would ensure that three-quarters of auto components are made in North America.
It’s “a new dawn for the American auto industry and the American autoworkers. … We will be manufacturing many, many more cars,” the president said.
Also, the pact would require that for at least 40 percent of autos built in North America, workers be paid at least $16 an hour. Wages in Mexico are far below that, undercutting the wages of the better-paid U.S. and Canadian workers.
The president credited the administration’s use of tariffs for helping to bring about this deal. It was achieved ahead of a midnight September 30 deadline for Canada to join an agreement the U.S. and Mexico struck in late August.
U.S. Trade Representative Robert Lighthizer, who led the negotiations over 14 months, said, “The USMCA will accelerate the manufacturing renaissance our country has enjoyed under President Trump.”
It creates a template for future U.S. trade deals based on a level playing field, strong ground rules on digital trade, intellectual property and financial services “to protect our competitive edge,” and a stop to unfair trade practices, Lighthizer said.
The new chapter on digital trade requires nondiscriminatory treatment of digital products, according to the U.S. trade representative, and the intellectual property protections for copyrights, trade secrets and pharmaceuticals go well beyond previous agreements.
Visit the U.S. trade representative’s website to read the details.
The USMCA will be submitted to Congress and the legislative bodies in Mexico and Canada after Trump, outgoing Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau sign it.
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