Trump Fulfills Promise to Base with Revised NAFTA Deal

Revisions in the NAFTA deal, which is set to be renamed the USMCA deal, fulfills key promises regarding the deal that Donald Trump made when first running for president. While some mainstream news outlets are deriding the fact that the deal does not make significant changes to all aspects of the NAFTA deal, the revisions will have a major, positive impact on major industries in the United States.

The dairy industry is enthused about the fact that the deal allows for more than 3.5% of the Canadian market to include U.S.-made dairy products. While the final allowed amount was less than the Trump administration wanted, it is a significant concession for Canada to make given the fact that the Canadian government has safeguarded its dairy market for years.

Furthermore, Canada has agreed to discard its relatively new milk-pricing policy and stop blocking U.S.-made goods that use dairy derivatives and/or products derived from dried milk. There are up to 40,000 dairy farms in operation throughout the United States and, as one third-generation dairy farmer has already noted, the new agreement’s stipulation allowing American dairy products to be exported to Canada in a tariff-free manner could boost local, rural economies by up to more than 200%.

The new deal will also have a major, positive impact on America’s auto industry. The original NAFTA deal stated that at least 62.5% of all the contents of autos imported into the United States had to be made in North America. This percentage has now been set at 75%. What is more, the deal stipulates that at least 40% of all the content of autos imported into the United States must be manufactured by workers who make at least $16 an hour.

The move is a clear win for workers in the United States who have been in danger of losing their jobs as auto companies move to Mexico in search of cheap labor. At the same time, the move also benefits both Canadian and Mexican auto workers as auto manufacturers will now have to pay their workers better wages in order to export cars within North American without paying tariffs.

While the auto and dairy industries are likely to see the most notable benefits from the new USMCA deal, these aren’t the only sectors that will benefit.

New internet commerce rules, which were not in place when the deal was first inked in the early 1990s, allow for US goods costing up to C$150 to be imported into Canada in a duty-free manner. The previous limit was a paltry C$20, hampering U.S.-based internet sellers from gaining a foothold in the Canadian online shopping market.

The medical industry also benefits as patent protection in Canada for certain U.S.-made medications will now be granted for ten years instead of eight. In Mexico, the patent protection threshold has risen from five to ten years. Furthermore, the deal includes an all-important sunset clause stipulating that it will end after sixteen years unless all three nations agree to keep it going. Every six years, Mexico, Canada and the United States are required to meet, review the agreement and fix any problems that have arisen.

The USMCA deal, like any other trade deal, does involve compromise. The Trump Administration had to give in on certain issues in order to gain concessions on others. The same can be said of both the Mexican and Canadian governments. Even so, the USMCA has much to offer the American economy as is evidenced by Wall Street positive reaction to the announcement of the new deal.

Rural workers stand to benefit the most as industries in states that Trump won in the 2016 presidential election should see an increase in jobs and productivity once the deal has been ratified by Congress. The announcement of the USMCA agreement could not come at a better time for the Trump Administration as the president shows that he has the knowledge and capability to negotiate on behalf of American workers.

As voters begin preparing to cast their vote in the mid-term elections, the USMCA deal, along with the positive state of the American economy in general, will likely motivate many to stick with the GOP instead of switching to a party that is putting more an increased emphasis on social rather than economic issues.

~ Liberty Planet

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