What’s in the USMCA deal?

The Guardian Weekly - - Finance -

The most sig­nif­i­cant dif­fer­ence be­tween Nafta and the USMCA may be as sim­ple as the re­brand­ing ex­er­cise it­self, which some ob­servers said would hand Trump po­lit­i­cal cap­i­tal, re­gard­less of its sub­stance.

Be­yond that, there are mean­ing­ful changes for the car in­dus­try. From 2020, cars must have 75% of their parts man­u­fac­tured in Canada, Mex­ico or the US to qual­ify for zero im­port tar­iffs – a big jump from the cur­rent 62.5% re­quire­ment.

At least 40% of a car made in North Amer­ica must also be made by a worker earn­ing at least $16 an hour, which is likely to ben­e­fit the US and Canada most.

An­other el­e­ment of the deal will ex­empt Mex­i­can and Cana­dian cars from any fu­ture US au­to­mo­tive tar­iffs up to cer­tain im­port quo­tas.

Else­where, US farm­ers will get greater ac­cess to Canada’s dairy mar­ket through an in­creased quota on for­eign im­ports.

Canada has long held high tar­iffs on most dairy prod­ucts, lead­ing to higher prices than in the US, while Trump has ar­gued that the US in­dus­try should be able to sell more prod­ucts to its north­ern neigh­bour.

One sur­prise area where there has been no change is that US tar­iffs on Cana­dian and Mex­i­can steel and alu­minium will re­main for now, even though this was seen as a key bar­rier to a deal.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.