U.S., Canada and Mexico just reached a sweeping new NAFTA deal (Source washingtonpost.com)
President Trump got his wish for a significantly revised North American trade deal. After more than a year of intense negotiations, the United States, Canada and Mexico reached an agreement to update the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations.
The new deal won’t go into effect right away. Most of the key provisions don’t start until 2020 because leaders from the three countries have to sign it and then Congress and the legislatures in Canada and Mexico have to approve it, a process that is expected to take months.
Goodbye NAFTA. The new deal will be known as the United States-Mexico-Canada Agreement, or USMCA. Trump, who had long disdained NAFTA, had suggested that he might call it the “USMC,” in honor of the U.S. Marine Corps, but in the end, USMCA won out.
The goal of the new deal is to have more cars and truck parts made in North America. 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.