(AmericanProsperity.com) – On Wednesday morning, President Trump signed the US-Mexico-Canada Agreement (USMCA) with approximately 400 guests including workers, farmers, and CEOs who will benefit from the new trade agreement.
The USMCA is an update to the North American Free Trade Agreement (NAFTA) that President Clinton signed in 1994. Trump said that NAFTA was a nightmare and “the worst trade deal in history.” He blamed NAFTA for manufacturing losses in Rust Belt states and said the deal made it too easy for US companies to move to Mexico where labor is significantly cheaper.
For nearly six months, Speaker of the House Nancy Pelosi (D-CA) and House Democrats held up the deal to focus on impeaching Trump instead of passing the USMCA to bolster the economy and helping entrepreneurs, farmers, and workers who would benefit.
What’s in the USMCA
There are five major revisions in USMCA over NAFTA that help American businesses and consumers:
- Rules on Country of Origin: Under NAFTA, 62.5% of the components of an automobile had to be made in North America to avoid tariffs. Under the new deal, 75% of components must be made in the US, Mexico, or Canada.
- Auto Manufacturing: By 2023, 40%-45% of car and truck parts must be made by workers who make a minimum of $16 per hour.
- Farming: Dairy and poultry farmers benefit significantly. Dairy markets in Canada must reform and remove tariffs on US dairy products and Mexico now has confidence to buy more poultry from US farmers instead of from Brazil.
- Digital Trade and Intellectual Property: Internet companies are protected against liability for content produced by users, prohibiting fees on music and ebooks, and extend copyright protections to 70 years beyond the life of the copyright holder.
- Sunset Clause: NAFA did not have an expiration date… USMCA has a sunset clause that says the deal expires after 16 years. Additionally, USMCA is subject to review every six years at which point the US, Mexico, and Canada can extend it at any time.
How Does USMCA Benefit the Average American?
The USMCA has significant benefits for corporations, small businesses, entrepreneurs, and workers by helping expand their products, commodities, and services around the world.
The increased demand for these products and commodities means more opportunities for everyone. It allows companies to provide more good-paying jobs and bigger paychecks as well as earn more profit. This all leads to a growing economy that encourages investment for even more growth.
Another significant boon under the USMCA is that the costs of agricultural items will go down. This creates a ripple effect throughout the economy that benefits restaurants, their patrons, as well as grocery consumers.
In addition, several auto manufacturers including Toyota, BMW, Volvo, and Mazda have announced they will be adding new manufacturing plants across the US. Thousands of jobs will be created in building the plants as well as building new cars.
Some studies estimate that the USMCA could add as many as 176,000 new good-paying, American jobs, and that is great news.
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