October 2, 2018


“U.S. officials intend to sign a new trade agreement with Canada and Mexico at the end of November, after which it would be submitted to the U.S. Congress for approval, a senior U.S. official said on Sunday. The new agreement will be called USMCA, the United States-Mexico-Canada Agreement.”


Main highlights:

  • Auto-makers must build a higher proportion of each car in North America to avoid tariffs and at least 30 percent of cars (rising to 40 percent by 2023) must be made by workers earning at least $16 an hour
  • Canada will relax quotas on dairy imports
  • The “data protection” period before generics can be sold for biologic drugs will be increased in Canada and Mexico to match the US standard
  • The dispute settlement system allowing companies to have disputes with local governments heard by a special panel will be removed, with the exception of allowing energy companies to bring cases against Mexico
  • NAFTA’s arbitration system allowing countries to challenge tariffs will remain

Wall Street Journal

See past issues

From the Left

The left doesn’t see many substantial changes from NAFTA, and is wondering if Trump’s unpredictable negotiating tactics may actually be effective.

“Overall, the changes are more than cosmetic, but perhaps a bit less than Trump promised... But more than the details, the most important thing about this deal is that it exists at all. One of the major questions about Trump’s approach to economic policy and globalization was whether he would simply light trade deals on fire, or use his sometimes unhinged rhetoric as a means to obtain some reforms. In the case of NAFTA, we have a solid answer."


On the one hand, $16/hour is “about three times the typical manufacturing wage in Mexico now. USMCA also stipulates that Mexico must make it easier for workers to form unions. The AFL-CIO is cautiously optimistic that this truly is a better deal for U.S. and Canadian workers in terms of keeping jobs from going to lower-paying Mexico or to Asia...

“[On the other hand] economists and auto experts think USMCA is going to cause car prices in the United States to rise and the selection to go down.”

Washington Post

Rather than focusing on issues important to special interest groups, a better approach would be to ask, “What are the big cost-centers for American citizens, and how can [trade policies] make them less burdensome? Creating speedy pathways for foreign medical professionals to work here — or for medical work to be outsourced — should be a no-brainer. Opening up hyper-concentrated domestic industries like aviation to more foreign competition also belongs on the list."


Some posit that “from [the] perspective across the Atlantic, this NAFTA reboot should only reinforce the newly apparent reality. Trump's unhinged-from-precedence-in-your-face negotiating style actually works.”


Minority view: Trump “won a big concession by persuading Ottawa to take steps to open up its highly protected dairy industry — which has long blocked U.S. competition with import quotas and tariffs as high as 300 percent... when it comes to tangible results, his renegotiation of NAFTA has worked better than his detractors expected.”

Chicago Tribune

From the Right

The right is hopeful, seeing the USMCA as an improvement to NAFTA and the first of many trade victories.

The right is hopeful, seeing the USMCA as an improvement to NAFTA and the first of many trade victories.

“Perhaps the most significant feature of the new agreement is it modernizes the quarter-century-old NAFTA to reflect the economic realities of 2018. The agreement gives new protections for intellectual property and seeks to expand financial services and digital commerce... For businesses, having clear and modern rules provide the certainty to plan for the future."

The Weekly Standard

By forcing Canada to “[roll] back protections for its domestic dairy industry," President Trump provided “a victory to American farmers on one of the key points of negotiation."

The Washington Examiner

In addition to helping dairy farmers, the USMCA benefits Americans through new rules for auto manufacturing, improved labor, safety, and environmental standards in Mexico, a sunset clause, better tariff dispute resolution processes, and limits on lawsuits.


So what if he’s rude to foreign leaders? Other presidents have been nice to them, but Mr. Trump has struck better deals. Do we elect American presidents to behave politely at Group of Seven summits, or to negotiate agreements that improve the position of U.S. manufacturers and farmers?"

Wall Street Journal

Worth noting: The deal will help the NFL - which Trump has routinely criticized - reap more advertising revenue, and “also ends the practice in the Canadian province of British Columbia of elevating the price of American wine imports, which will particularly help hyper-liberal wine-growing northern California. When it comes to defending American interests, Trump is the president of all America, not just his political supporters."

Fox News

Minority view: “The new deal strips protections against predatory government behavior for most foreign investors" by forcing companies to use [often corrupt] Mexican courts. In addition, “higher North-American-made content requirements in both finished products and parts... will add costs and complexity to building cars on the continent, and make the final products less competitive world-wide."

Wall Street Journal

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