Trump signs new trade deal with Canada, Mexico
After bipartisan passage in Congress, President Trump has signed a new trade deal with Canada and Mexico that is designed to discourage the outsourcing of American jobs. The United States-Mexico-Canada Agreement, or USMCA, overrides the 1993 North American Free Trade Agreement, but keeps most of NAFTA intact.
The agreement limits the use of supply chains abroad and opens up Canada to more U.S. farm goods, including dairy products. In an attempt to make outsourcing to Mexico less attractive, the deal also requires that 75 percent of automobile parts made in North America be duty-free, up from 62.5 percent under NAFTA, and that at least 40 percent be built by people making at least $16 an hour.
The International Trade Commission, a federal agency, estimates the new deal will raise U.S. domestic product by $68 billion, or about 0.35 percent, and add 176,000 jobs nationwide. Such estimates have led critics to argue that the deal’s benefits are marginal at best.
Wisconsin business officials praised the deal, which will provide some certainty for the manufacturing and agricultural sectors in their dealings with the state’s two largest trading partners. Wisconsin businesses export nearly $11 billion to Canada and Mexico, and an estimated 231,000 Wisconsin jobs are linked to trade with the two nations.
“This trade deal will grow Wisconsin’s economy, provide greater opportunity to Wisconsin manufacturers and farmers, and help expand the Badger State’s reach throughout North America,” states Kurt Bauer, president of Wisconsin Manufacturers & Commerce.