![]() ![]() In the past, pro-company unions in Mexico signed contracts behind workers’ backs. Workers there can now vote freely and fairly on joining unions, approving contracts and choosing union leaders. The United States has achieved more success in using the deal to pressure Mexican employers to comply with their country’s labor reforms. A USMCA trade court, in a case brought by Mexico and Canada, found that Washington was applying the rules more strictly than was allowed. “They didn’t have a ton of time to deal with USMCA.’’’Įven after the auto rules took effect, the United States was slapped down for the way it tried to enforce them. “Border officials were worried about clearing cargo in ports and getting rid of congestion,’’ said Daniel Ujczo, senior counsel at the law firm Thompson Hine in Columbus, Ohio. Enforcement was delayed as customs officials faced supply chain backlogs at the height of the COVID crisis. And at least 40% of vehicles would have to originate in places where workers earn at least $16 an hour - that is, the United States and Canada, not Mexico.īut those so-called automotive rules of origin stumbled out of the gate. That meant more content had to come from higher-wage North American workers, not imported cheaply from China or elsewhere. To qualify, 75% of a car and its parts had to come from North America, up from 62.5% under NAFTA. The USMCA sought to make it harder for autos and auto parts to enjoy tariff-free treatment. Perhaps the most consequential changes the pact wrought were designed to reverse one of NAFTA’s unhappy byproducts for Americans: The old deal incentivized companies to close factories in the United States, ship production to lower-wage Mexico, then export goods back into the United States - duty free. Chamber of Commerce’s senior vice president for the Americas. ![]() Given how it modernized North American trade, the “USMCA is a marked improvement,’’ said Neil Herrington, the U.S. The USMCA, for instance, bars the United States, Mexico and Canada from hitting each other with import taxes on music, software, games and other products sold electronically allows the cross-border use of electronic signatures and authentication and protects companies from having to disclose in-house source codes and algorithms. That is especially true in light of the unusual economic tumult of the past three years: A devastating pandemic, followed by severe labor shortages and supply chain backlogs and a resurgence of rampant inflation. That was up 27% from 2019 and was above a 20% gain in trade with China over the same period.īut it’s hard to tease out which economic gains can be credited to the USMCA and which happened for a variety of unrelated reasons. America’s trade with Canada and Mexico - exports plus imports - reached a record $1.78 trillion last year. ![]() And North American commerce has flourished. Since January 2020, vehicle and parts manufacturers have actually added nearly 90,000 jobs. Trump said the pact would create 76,000 auto industry jobs. “I don’t expect that we’re ever going to be able to say that (the USMCA) accomplished very much,’’ said Alan Dierdorff, a professor emeritus of economics and public policy at the University of Michigan. They have increased since 2020 - but only by about $8 billion. auto parts to Mexico would rise by $23 billion. The former president also predicted that exports of U.S. workers, who no longer must compete with severely underpaid Mexican laborers without real bargaining power. Trade officials and experts predict, though, that the benefits will also flow, in time, to U.S. Novel provisions of the pact have enhanced the ability of long-exploited Mexican workers to form unions and secure better wages and working conditions. It’s just that the beneficiaries have so far been mostly in Mexico. Yet while the the deal’s overall impact has been slight, it has nevertheless been helping workers on the ground. It couldn’t have been, given that trade makes up less than a third of America’s $26 trillion economy. The trade pact hasn’t proved to be the economic bonanza Trump boasted it would be. The USMCA, which Trump hailed as “the fairest, most balanced and beneficial trade agreement we have ever signed,” will reach its third anniversary Saturday. ![]() Out was the North American Free Trade Agreement. After a couple of years of negotiations, he got what he wanted. So Trump pressured Mexico and Canada to replace their mutual pact with one more to his liking. “No longer,’’ he vowed six years ago, “are we going to allow other countries to break the rules, to steal our jobs and drain our wealth.” trade deficit and the shuttered factories in America’s heartland. WASHINGTON (AP) - To President Donald Trump, America’s trade relationship with Mexico was intolerable. ![]()
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