As of this morning many people are asking this question. Of course the administration is touting the deal as “wonderful.” But the financial media seem to be shrugging their collective shoulders. At this point the consensus is that the agreement is not a radical departure from NAFTA.
There are some clear areas of change however. Some are structural. The new agreement, the USMCA, sunsets after 16 years. NAFTA extended indefinitely.
Some changes are wage oriented. 30% of cars made in the region must now be made with a minimum wage of $16 USD. Unions are “cautiously optimistic.” But as The Post points out in the attached article, this will likely speed automation.
There are other small “wins” for US dairy farmers (a crony constituency if there ever was one). And there are other tweaks.
China now looks to be in the Trump administrations crosshairs squarely. Watch for more on the Sino trade front during the coming week.
NAFTA was a crony trade deal in many respects. It certainly was not “free trade” as was touted by its proponents. The same it looks like can be said for the USMCA. These agreements are for managed trade, not free trade, and that ultimately hurts consumers. But that is not always readily apparent.
So far the USMCA looks to be more of the old with some fresh lipstick. We’ll see if this assessment holds as more details come to light.
(From The Washington Post)
The new deal is expected to take effect around Jan. 1, 2020. Congress has to approve it, a process that will take months, but confirmation looks likely, given that Republicans are pleased Canada got on board and some Democrats are pleased with the stronger labor provisions.