After countless negotiations, all sides see themselves as winners: u.S. President donald trump has pushed through a free trade agreement for north america that he had pushed for, while the democrats in congress, in turn, want the pact to be significantly improved.
Even the unions buried the agreement. The pact now includes stricter rules for workers’ rights and environmental protection, among other things, house of representatives speaker nancy pelosi told reporters tuesday.
The agreement, known as the USMCA, for the u.S., mexico and canada is now expected to be ratified by parliament shortly. It will replace nafta, the north american free trade pact signed in 1994. "There’s no question that this agreement is better than nafta," pelosi said. USMCA also includes stronger mechanisms to enforce agreed norms. "We celebrate a victory for american workers today," pelosi said. The original text proposed by the government had not been acceptable. AFL-CIO chief richard trumka buried the deal. Workers could be proud, he said.
The agreement affects nearly 500 million people and covers an area with a total economic output of around 23 billion US dollars (20.8 billion euros). Partner countries exchanged goods and services worth about $1.4 billion in 2018.
A contract amendment containing the renegotiated points was signed tuesday at the mexican national palace. U.S. Trade representative robert lighthizer, canadian deputy prime minister chrystia freeland and trump adviser and son-in-law jared kushner traveled to mexico city for the event.
The trade agreement is broadly based on nafta, but includes new rules for the auto industry, gives U.S. Farmers better access to markets in neighboring countries and includes provisions for intellectual property protection and digital trade. The latter hardly played a role 25 years ago. Now, for example, electronically distributed books, music, games and software will be allowed to be traded duty-free.
USMCA also sets new limits on what percentage of a car must be made in one of the member countries to be exported duty-free. This will also affect german companies like volkswagen or BMW that produce in north america. Another part aims to ensure that 40 to 45 percent of the components used in a car are made by workers earning at least $16 per hour. In this way, trump wants to make it less attractive to move jobs to mexico. The planned strengthening of workers’ rights is also aimed at achieving this goal.
"This is one of the best trade agreements ever concluded for this country," the u.S. President said on monday. "It’s a very important agreement."Trump had rejected the nafta deal because, in his view, the agreement had too many disadvantages for the u.S., particularly in agriculture and the auto industry. Trump therefore pushed through the renegotiation. It was on the verge of failure several times.
USMCA has also been a bone of contention for months in US politics. Trump accused the democrats of not getting anything done for the people of america and only focusing on baseless investigations against him. For the democrats, on the other hand, it was a balancing act: they actually wanted to get the agreement through parliament, but had to wrest as many concessions as possible from the government so that they didn’t give trump a rough victory a year before the presidential election. U.S. Trade representative lighthizer, meanwhile, agreed with canada and mexico on the changes demanded by congress.
Mexico’s president andres manuel lopez obrador expressed satisfaction with the changes. "We have spent more than a year on this, and it has not been easy," he told journalists on tuesday. "In the end, it’s a good result – and i would say: not only for mexico, but it’s good for all three countries."Lopez obrador said that in addition to labor law and the environment, the changes also affected the trade in steel and aluminum.
The heads of state and government of the three countries had originally signed the USMCA treaty at the end of last year on the fringes of the G20 summit in buenos aires. Mexico is the only one of the three countries to have already ratified the agreement. Parliament is now also expected to approve the addendum.
U.S. Vice president mike pence, who had made a special effort to push for the agreement, said tuesday that USMCA shows that since he took office, president trump has been "fighting for trade agreements that prioritize american jobs and american workers". The acronym USMCA stands for "united states mexico canada agreement.