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This agreement marks a milestone for President Trump, who pledged in the 2016 election to renegotiate or terminate the Nafta. The new deal, to be ratified by Congress, is not expected to come into force until next year at the earliest, and Trump will have to fight for Nafta's support if the Democrats take the presidency.
At the same time, the details are just beginning and companies have not had time to analyze the text of many provisions, which were confidential during the negotiations.
For now, here are 10 things to know about the new Nafta deal:
1. Rules of the car
Do you want to import a duty-free car from another Nafta country? It will be more difficult if the new agreement is adopted, compared to the existing 1994 pact. Vehicles would require 75% North American content, compared to 62.5% currently. This change is a victory for unions and workers in the auto industry, but a headache for global suppliers to the auto industry.
2. Wages
The new rules would require that at least two-fifths of an eligible North American duty-free vehicle come from workers earning at least $ 16 an hour. See this as a cap for the number of coins coming from Mexico at low wages. But companies get credits for high-tech research and development.
3. Labor standards
The Trump administration and its unusual trade allies among US Democrats and Unions are especially proud of a set of higher labor standards that, if applied, would lead to stronger unions in Mexico and possibly at higher wages. However, some Democratic lawmakers say they are not satisfied with the level of application of these labor provisions.
4. Sunset Clause
The agreement will face a "sunset" in 16 years, if it is not renewed or renegotiated actively. The three countries will meet every six years to decide whether the pact should be renewed, which could allow Nafta-Pocalypse to keep its future at 16 years. Canadian and Mexican officials said uncertainty over sunset clauses undermined investments in their countries. Nevertheless, the companies are somewhat satisfied that the Trump administration did not obtain the 5-year sunset clause it was seeking.
5. Reimbursement of exchange rates
In a world first, the Nafta Pact includes enforceable rules designed to deter countries from artificially weakening their exchange rates in order to gain commercial benefits. While the United States, Canada and Mexico are not regularly held accountable for this type of offense, the auto sector and its allies hope that the rules will be included in the agreements with Asian countries. 'to come up.
6. Negotiation on dairy products
US authorities have negotiated better access to the Canadian dairy market, where a government system controls prices and limits the volume of imports with high tariffs. The Dairy Agreement should be praised by legislators in milk-rich states, but it could have political ramifications in Canada, including in Quebec's provincial election Monday.
7. Dispute Resolution
The NAFTA includes extremely complex systems that hold countries accountable when they bend or break trade rules. Trump administration officials are wary of systems that may prevail over the US government and have sought to weaken conflict resolution systems. Trade lawyers will analyze the text of the agreement so that industries and unions can form opinions and influence legislators' votes. A system that allows foreign companies to challenge governments – investor-state dispute settlement, or ISDS – has been significantly reduced.
8. Tariff reviews
Canadian officials fought to maintain another arbitration system that would allow the country to challenge US rights to Canadian imports allegedly dumped or subsidized, for example. US Trade Representative Robert Lighthizer and American lumber producers wanted to abolish the system, but in a victory for Ottawa, the United States agrees to keep it.
9. Trump-Tariff Relief
Under the agreement reached last month, Mexico would be protected from any national security tariffs envisaged by the Trump administration on vehicles and auto parts, and Canada secured a similar deal on Sunday, according to a US official. But Lighthizer said any respite from Canada on steel and aluminum tariffs will have to be negotiated separately.
10. No More "Nafta"?
"Nafta" was excoriated during the 2016 presidential campaign and President Trump, a veteran of marketing and branding, tried to change the name. The new agreement will be called the "United States-Mexico-Canada Agreement" or "United States of America," the official told reporters.
Write to William Mauldin at [email protected]
