Mexico and the U.S had planned to release a renegotiated North American Free Trade Agreement (NAFTA) by Friday evening. However they abruptly agreed to hold off the release in order to give Canada more time to participate, and make it, once again a three way deal.
In August, the White House announced that Mexico and the U.S. had reached a deal with new terms to replace NAFTA.
Nafta was signed by Canada, Mexico, and the U.S. back in 1994, but Trump has criticized it as the “worst trade deal in the history of the world” and vowed to replace it.
The Trump Administration has done just that, but Canada has yet to reach a deal with the U.S.
According to the United States Trade Representative, it outlines new rules aiming to incentivize manufacturers to buy goods and materials in North America. Specifically, the rules focus on the car industry and on steel. The new agreement is expected to require that 75 percent of parts in any car sold to North America be produced in either the U.S. or Mexico.
40-45 percent of auto parts in cars need to be made by workers earning at least $16 USD per hour. Automakers who don’t comply with the new rules will pay a 2.5 percent tariff, similar to the previous Nafta.
“The text is expected to conform to details previously released on tighter automotive rules requiring an increase in regional value content to 75 percent from 62.5 percent previously, with 40 percent to 45 percent coming from “high wage” areas, effectively the United States,” writes Global News.
The draft must be submitted to Mexico’s Senate which has to ratify the agreement.
“Mexico and the U.S. want the trade deal to get congressional approval before the end of November, which would allow Mexican President Enrique Peña Nieto to sign it before leaving office. President-elect Andrés Manuel López Obrador, who will take office Dec. 1, has expressed support for the agreement. His Morena party and allies have a majority in Mexico’s Senate,” writes The Wall Street Journal.
Canada, on the other hand, is not in a hurry to sign a new deal though.
“We are in a very tough negotiation with the United States over NAFTA … there is no deadline on this. As far as we are concerned we want a deal that is good for Canadians and that’s the bottom line,” said Canadian Transport Minister Marc Garneau on Friday
Author’s note: Like Trump said he would, he is renegotiated deals to put America first.