How the new USMCA deal will affect you

NAFTA 1.0 wasn’t the awful deal President Trump said it was, but NAFTA 2.0 is an improvement and, more importantly, it tells us good things about Trump’s skill at deal making.

After Trump’s news conference, “the only difference was that instead of seeing the glass half-full, I was seeing it half-empty”, MacNaughton chuckled in an interview.

The provision specifies that if one of the current North American Free Trade Agreement partners enters a free trade deal with a “non-market” country such as China, the others can quit in six months and form their own bilateral trade pact.

Observers also suggested that the USMCA clause may be created to send a message to Beijing that the United States’ North American partners support its push to get China to clean up its practices and open its markets. The higher threshold will keep more parts from other regions out, while boosting production and jobs in the region. Trump said he told King Salman it was too expensive and in order for the United States to cooperate, Saudi Arabia would have to foot the bill, which Trump pegged at $4 billion.

The rules incentivize the use of high-wage manufacturing labor in the auto sector, which will help provide a level playing field for American producers and workers.

“While the administration’s proposal improves some elements of the existing NAFTA, such as strengthened IP rights, increased market access for U.S. dairy processors, and a new chapter on digital trade, other provisions diminish NAFTA’s economic benefits and create needless uncertainty”, said Sen. The Daily Farmers of Canada, an organization that represents Canadian farmers, has issued a statement criticizing the agreement, saying that it will limit exports and make them give up almost 3.6 percent of their dairy sector.

The new deal will also likely pressure companies to shift production from Mexico to the U.S.by mandating that factories paying workers at least $16 per hour must generate a minimum input. Chapter 19 is the dispute settlement mechanism that allows countries to seek remedies for breaking the rules.

That morning, before Trump’s news conference, U.S. Ambassador David MacNaughton spoke at an event in Toronto with U.S. -based website Politico, where on a scale of one to 10, he put the chances of the two sides being able to reach a deal at “five”. If the three countries concur on whether the deal is still effective, it will be finalised on for the full 16 year-period.

President Trump speaks during an announcement on the United Sates-Mexico-Canada agreement in the Rose Garden at the White House on Monday in Washington. We are in communication with them.

Mr Trump’s administration has undertaken an investigation that could lead to auto tariffs, but it appears unlikely to finish up any time soon. “We commend the negotiators for their commitment to finding a path forward that includes the U.S., Mexico, and Canada”, Tom Donohue, the U.S. Chamber president and CEO, said in a statement. And Trump repeatedly said he was ready to scrap the deal entirely, which in my opinion would have been the worst outcome.

“It certainly is important in the overall calculus for Republicans in their quest to hold the Senate and the House in 2018”, he said.

The new deal limits those rights, with one major exception: USA oil and gas companies.

The new agreement includes stronger protections for patents and trademarks in areas such as biotech, financial services and domain names – all of which have advanced considerably over the past quarter century.

By Tuesday, even Trump seemed to be in on the joke as he explained USMCA to a convention of electrical workers: “Like YMCA or U.S. Marine Corps with an A at the end”.

He added, the deal will close job-killing loopholes, which he says will be a great victory for American farmers, manufacturers and autoworkers.

NAFTA 2.0 makes “significant changes to the rulebook that has governed continental commerce since 1994”, he wrote in an email.

Certainly, this deal isn’t a game changer, and it won’t rollback all the damage the original NAFTA did.

With a normal president in a normal environment, Trump saying that two foreign leaders “hate America” while donors chuckle might precipitate a major diplomatic incident.

Within 60 days after the deal is signed: The Trump administration must notify Congress of necessary changes to USA law that need to be made to enact the deal.

Previously, Canadians buying online from the USA could only purchase up to $20-Cdn. worth before having to pay import duty.