On December 19, 2019, the U.S. House of Representatives passed the U.S-Mexico-Canada (USMCA) trade deal negotiated by the leaders of the three North American countries last fall. The passing of this deal in Congress sets the stage for the deal, touted as a huge win by President Donald Trump, to officially take effect, replacing the 1994 North American Free Trade Agreement (NAFTA). Let’s take a look at the biggest reforms the deal makes, and those are found in the automotive industry, agricultural industry, and in relations with China.
- Increases the percentage of parts used in North American made cars and trucks that must be sourced from North America from 62.5% to 75%.
- Adds a requirement that 40% to 45% of a car must be produced by workers earning at least $16 per hour.
- Requires Mexico to pass laws which provide stronger union representation and protections.