US President Donald Trump is all set to sign the new North American trade pact with Mexico and Canada next week, according to the White House official on Thursday.
The USMCA, the fruit of years of negotiation between the three key trading partners, is billed as an update to the 1994 North American Free Trade Agreement, which Trump had long lambasted as a job killer and threatened to scrap outright.
Earlier NAFTA created a vast free-trade zone across North America, leading to radical shifts in the makeup of industries in the three countries and vastly increasing cross-border exchanges in goods, services and people.
On December 10, US House Democrats reached a tentative agreement with labor leaders and the White House over a rewrite of the US- Mexico-Canada trade deal that has been a top priority for President Trump.
House Speaker Nancy Pelosi said that she expected the final language of the US-Mexico Canada Agreement to be set which would bring Democrats to a “moment of truth” on whether to proceed to passage.
The new deal changes content rules on auto manufacturing and requires higher salaries for some Mexican auto workers.
It also makes changes to e-commerce, intellectual property protection and dispute settlement for investors, as well as tougher labor provisions that require reforms to Mexico’s labor laws.
Last year, US Trade Representative Robert Lighthizer negotiated the replacement agreement with Canada and Mexico.
The trade pact picked up some momentum after Mexico in April passed a labor-law overhaul required by USMCA. The reforms are meant to make it easier for Mexican workers to form independent unions and bargain for better pay and working conditions, narrowing the gap with the United States.
In 2018, President Trump called NAFTA “the worst trade deal in history” during his election campaign, and also said that the name has “bad connotations” and he plans to scrap it as he attempts to strike better trade deals with US neighbours.