USMCA Unveiled: NAFTA Renegotiated with Canada & Mexico

Sean Reid
October 4, 2018

"NAFTA created a somewhat free trade zone, where the USMCA creates a true free trade zone in North America, other than specific products", said Matt Will, associate professor of Finance at the University of Indianapolis, talking to our partners at Inside Indiana Business.

"Kansas has over 100,000 NAFTA-reliant jobs, and we export nearly three to four times more to Canada or Mexico than to China".

Marshall said the US had set the deadline to finalize its agreement with Mexico before the new Mexican administration takes over.

"We urge Congress to approve the USMCA", said API president and CEO Mike Sommers.

"I don't really like it", Weekes said of the new "non-market" clause.

Will said IN will also have advantages IN industry because the deal bans other countries from giving money to industries so they can compete against America.

However, a few issues like USA tariffs on steel amd aluminum imports, along with retaliatory tariffs were left out of the USMCA deal.

Castro said he also want to see what provisions were made to protect the environment.

"Unfortunately, we have been presented with an unfinished text to review". But Lighthizer said "our agreement is substantially better" than the Trans-Pacific Partnership.

The bottom line is that we simply do not have enough information at this time to know whether NAFTA 2018 is in the economic interests of the United States, the AFL-CIO said.

It represents "one last effort at being punitive against Canada" and also telegraphs the Trump White House's priorities on worldwide trade, with Mexico literally coming before Canada, he added.

Meanwhile, Fitch Ratings said that a deal between the Canadian, Mexican and US governments for a revised trilateral free trade agreement should reduce key uncertainties for US-Canada and US-Mexico trade that have been in place since the US announced its intention to renegotiate Nafta.

"The Teamsters are pleased with the progress that has been made towards replacing NAFTA". Wildeboer said the tentative USMCA deal has succeeded where other pacts have not in protecting the North American supply chain. This is about 12 percent higher than what was mandated under the original NAFTA. And with that, after almost 14 months of tense negotiations, we now have a newly named regional trade agreement.

"We would have moved forward with just Mexico", Marshall said.

"However, until we are satisfied that those obligations will be subject to swift and sure enforcement, we can not endorse this renegotiation". Many congressional Democrats have been critical of NAFTA, blaming it for spurring offshoring of jobs to Mexico, with its low wages and poor labor rights.

Trudeau repeatedly made the point that he had managed to preserve the protected domestic market, which some USA interest groups said should be scrapped.

Reuters points out that the clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump's efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a "back door" to ship products tariff-free to the United States.

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