Stay At The USMCA

Congressional approval still awaits as President touts ‘historic’ deal

Updating a previous item, the United States, Mexico, and Canada inked a three-way agreement on North American trade on Monday. Colloquially being referred to as “the New NAFTA” by news outlets around the world, the agreement will officially be called the United States-Mexico-Canada Agreement (USMCA).

First, some of the more pertinent features of the deal:

Canadian dairy: Canada will give a greater market share to U.S. dairy farmers, after conceding to change pricing for Class 7 dairy products.

American-made cars: Starting in 2020, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.

Steel tariffs: The United States’ current 25% tariff on all Canadian steel remains intact following the deal. The Washington Post reported that White House officials feel this will change in the near future.

Six year observation period: The USMCA stipulates that the three nations will review the agreement after six years. If approved at that point, then the deal will continue for a full 16 year period.

-Increased intellectual property protections. Reflecting the modern era of technology and business, the new IP chapter is 63 pages and contains more-stringent protections for patents and trademarks, including for biotech, financial services and even domain names.

President Trump hails the deal as a boon for the U.S. manufacturing industry. However, this deal is likely to face its toughest obstacle in needing to gain Congressional approval in order to be finalized. It is considered highly likely that Democrats within the legislative branch will move to block the deal, especially with elections looming in November. Many believe Democrats in the House and Senate will, at the very lease, aim to delay the final approval until those midterm elections are complete, ,giving them an opportunity to take back the majority in both chambers. A Democratic-friendly deal could then be brought into consideration and would become far more likely.

If nothing else, the deal proves President Trump was able to get Canada to the negotiating table and ultimately past it, something many doubted would occur during the last month’s process.

“Trump was able to force Canada and Mexico to make major concessions from their initial position, but in the end the White House pulled back from some of its most stringent demands, including the possibility of terminating the North American Free Trade Agreement entirely,” Damian Paletta and Erica Werner of the Washington Post reported Monday.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: