WASHINGTON - President Trump has signed a new North American trade agreement. The $1.3 trillion agreement is the biggest trade deal of all time.
The United States-Mexico-Canada Agreement (USMCA) will replace the North American Free Trade Agreement (NAFTA), which has been in place since 1994 - should it be ratified by all three countries. Mexico has officially approved the deal and Canada has not yet made a decision. The agreement had bipartisan support, passing with big majorities in both the Senate and House.
The new agreement focuses primarily on the auto industry, steel and aluminum tariffs, and dairy, egg, and poultry markets. USMCA will require companies to produce at least 75 percent of auto components in North America to avoid tariffs. By 2023, 45 percent of all parts must be made by workers who earn at least $16 an hour.
USMCA was signed in October 2018, but U.S. House Democrats wanted provisions on worker rights and enforcement of labor rules spelled out in the new agreement. The White House had to provide Congress with a final text. Other areas of negotiation included Mexican steel and aluminum product definitions and liability for tech companies.
The administration expects the deal to create 76,000 jobs in the auto industry. It also opens up Canada's market for American dairy farmers, potentially creating 176,000 jobs.
The International Trade Commission says the agreement could lift U.S. GDP by 1.2 percentage points and create as much as 589,000 jobs.
The Wood Machinery Manufacturers Association has supported USMCA for several years, believing that it would provide WMMA member companies with an opportunity to benefit from open trade between the three countries.
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